Posted on 07/29/2004 9:49:23 PM PDT by BenLurkin
CHICAGO (Reuters) - Health insurer Aetna Inc. (NYSE:AET - News) on Thursday said second-quarter profit rose on higher premiums and increased membership and it raised its outlook for the year, pushing its shares up more than 6 percent.
The company, which has experienced a dramatic turnaround in the past few years after struggling in the 1990s, again raised its profit forecast for 2004.
The Hartford, Connecticut-based insurer is also reversing a years-long membership slide, which knocked it down from its spot as the biggest managed health-care company. Aetna added 95,000 new members in the quarter, bringing its total enrollment to 13.4 million.
"I thought the quarter was pretty good -- they took on more members than they thought they were going to and raised guidance by about a dime," said Sherwood Small, president of Boston Private Value Investors, which owns Aetna.
Investors have their eyes on enrollment as the pace of U.S. job growth waxes and wanes. The rate of growth lagged in June after several months of robust gains.
Since most health care in the United States is provided through employers or the government, the jobs outlook affects health insurer enrollment.
The Hartford, Connecticut-based company said it earned $286.3 million, or $1.79 per share, compared with $138.4 million, or 87 cents per share, a year earlier.
Excluding items related to medical cost estimates, the company earned $1.70 per share. On that basis, Wall Street analysts on average were expecting $1.66, according to Reuters Estimates.
Aetna now expects operating earnings of $6.75 to $6.85 per share this year, compared with a previous outlook of $6.60 to $6.75 per share.
Second-quarter revenue rose to $4.88 billion from $4.47 billion a year earlier.
Aetna shares rose $4.84 to $83.82 in afternoon trading on the New York Stock Exchange.
The company, which has experienced a dramatic turnaround in the past few years after struggling in the 1990s, again raised its profit forecast for 2004.
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