Aetna's profit sinks as medical costs climb
Aetna's (AET) fourth-quarter earnings sank 49 percent as the health insurer's medical costs climbed and it absorbed costs for litigation and the purchase of another insurer, among other expenses.
The Hartford, Conn., insurer earned $190.1 million, or 56 cents per share, in the three months that ended Dec. 31. That's down from $372 million, or $1.02 per share, a year earlier.
Adjusted earnings, which exclude several charges, totaled 94 cents per share. Analysts forecast, on average, earnings of 97 cents per share, according to FactSet.
Total revenue climbed 16 percent to $9.93 billion due largely to a one-time pension premium. Excluding that and other one-time items, revenue grew 5 percent to $8.96 billion.
Analysts expected revenue of about $8.89 billion, according to FactSet.
The company's health care costs climbed more than 9 percent to $6.12 billion in the quarter, while its total benefits and expenses jumped 21 percent. The insurer booked an after-tax $78 million charge tied to the settlement of litigation over its payment of health care providers outside its network.
The insurer also recorded a charge of nearly $13 million tied to its acquisition of Medicaid and Medicare coverage provider Coventry Health Care. Aetna announced that $5.7 billion deal about a month before the quarter started.
Aetna Inc. is the third-largest commercial health insurer based on enrollment, trailing WellPoint Inc. and UnitedHealth Group Inc.
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