Aetna has hiked its 2015 earnings outlook beyond analyst expectations after reporting first-quarter net income that jumped 17 percent and also topped forecasts.
The nation's third largest health insurer said Tuesday it now expects operating earnings this year to range between $7.20 and $7.40 per share. That's up from a forecast it made in February for earnings of at least $7 per share. And that was a 10-cent-per-share increase from its initial 2015 forecast.
Company leaders told analysts in February that they considered their then-new forecast a floor Aetna aimed to exceed.
Analysts expect, on average, 2015 earnings of $7.17 per share, according to FactSet.
Aetna said it raised its expectation for 2015 after seeing operating earnings, revenue and enrollment all grow in the year's initial quarter. The insurer's net income also climbed to $777.5 million from $665.5 million last year, when gains from Aetna's acquisition of Coventry Health Care began to help results.
Operating earnings, which exclude items like capital gains, totaled $2.39 per share in this year's quarter.
Analysts expected, on average, earnings of $1.95 per share, according to Zacks Investment Research.
Operating revenue of $15.1 billion grew 8 percent in the quarter but came in below average analyst expectations for $15.45 billion, according to the Zacks survey.
Aetna followed rival UnitedHealth Group Inc. in becoming the second large insurer to trump Street expectations and raise its 2015 forecast after reporting first-quarter results.
Health insurers have entered 2015 with a more optimistic outlook than they had at the start of last year, when Medicare Advantage funding cuts hung over an industry that also was dealing with uncertainty from its first open enrollment period for the health care overhaul's public insurance exchanges.
Health insurance is Aetna's main business, but it also sells dental, group life and disability coverage.
The company's stock closed at $106.92 on Monday. Aetna shares climbed 30 percent last year and have already advanced another 20 percent so far in 2015. Like competitor UnitedHealth, Aetna has seen its share price double since 2012, hitting several all-time high marks along the way.
Two more large health insurers — Anthem Inc. and Humana Inc. — will report first-quarter results Wednesday.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on AET at http://www.zacks.com/ap/AET
Keywords: Aetna, Earnings Report, Priority Earnings