Aetna Reports Profit That Beats Estimates, Raises Forecast

Aetna Inc., the second-largest U.S. health insurer by market value, reported profit that topped analysts’ estimates and raised its full-year earnings forecast for a fourth time.

Third-quarter operating earnings were $1.90 a share, beating the $1.77 average estimate of analysts surveyed by Bloomberg. Net income was $560.1 million, or $1.59 a share, compared with $594.5 million, or $1.67, a year earlier, the Hartford, Connecticut-based insurer said Thursday in a statement.

Aetna agreed in July to buy Humana Inc. for about $35 billion, mainly to expand in the business of selling private Medicare plans to the elderly. That’s one of two massive potential deals that would reshape the U.S. health-insurance industry, spurred in part by the 2010 Patient Protection and Affordable Care Act.

Other large health insurers have disappointed investors with their third-quarter reports. UnitedHealth Group Inc. said it plans to give a more conservative 2016 earnings outlook than some analysts had expected, and Anthem Inc. said it’s facing challenges next year in its business serving individuals and in some Medicaid contracts. Medical costs at both firms also rose in the third quarter.

Still, Aetna’s deal for Humana and Anthem’s agreement to pay about $48 billion for Cigna Corp. have fueled a rally in health insurers this year. Aetna is up 25 percent since Dec. 31.

Aetna said it expects per-share operating earnings of $7.45 to $7.55 a share in 2015, compared with the average analyst estimate of $7.53. In August, the insurer forecast 2015 earnings of at least $7.40 a share.

Medical membership decreased to 23.5 million people from 23.6 million as of Sept. 30, 2014. Revenue rose to $15 billion from $14.7 billion a year earlier.

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