Aetna Earnings Cheat Sheet: Strong Profit Momentum Push Shares Up 8%

S&P 500 (NYSE:SPY) component Aetna, Inc. (NYSE:AET) posted lower net income in the first quarter compared with a year-earlier period. Aetna Inc. is a health insurance company. It provides its customers, ranging from individuals to employer groups to governmental units, with traditional and consumer-directed health care benefits products and related services, such as medical, pharmaceutical, dental, behavioral health, group life and disability plans.

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Aetna Earnings Cheat Sheet for the First Quarter

Results: Net income for the health care plans company fell to $586 ($1.50/share) vs. $562.6 million ($1.28/share) a year earlier. A decline of 100% from the year earlier quarter.

Revenue: Fell 2.7% to $8.39 billion YoY.

Actual vs. Wall St. Expectations: AET beat the mean analyst estimate of 97 cents/share. Estimates ranged from 83 cents per share to $1.10 per share.

Quoting Management: “We are pleased that the strong momentum we achieved last year continues into 2011,” said Chairman, CEO and President Mark T. Bertolini. “Our core businesses are performing well with disciplined pricing and competitive new product designs. We are generating excitement in the marketplace about the integrated solutions that Aetna, Medicity and ActiveHealth Management bring to health care providers seeking to create Accountable Care Organizations (ACOs). We expect the ACO relationship we recently established with Carilion Clinic to be the first in a series of ACO announcements in the coming months.”

“Our financial position, capital structure, and liquidity all continue to be very strong,” said Joseph M. Zubretsky, senior executive vice president and CFO. “The solid performance of our core business continues to generate significant cash flow to fund our investments in profitable growth opportunities, such as the acquisitions of Medicity and Prodigy Health Group. “We now project full-year 2011 operating earnings per share of $4.20 to $4.30.”

Key Stats: Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 30% from the year earlier while the figure increased 52.5% in third quarter of the last fiscal year, 41.7% four quarters ago and 28.5% five quarters earlier.

Competitors to Watch: UnitedHealth Group Inc. (NYSE:UNH), Health Net, Inc. (NYSE:HNT), Coventry Health Care, Inc. (NYSE:CVH), WellPoint, Inc. (NYSE:WLP), CIGNA Corporation (NYSE:CI), WellCare Health Plans, Inc. (NYSE:WCG), Humana Inc. (NYSE:HUM), Centene Corporation (NYSE:CNC), HealthSpring, Inc (NYSE:HS), and Universal American Corp. (NYSE:UAM).

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