Aetna Shares Keep Sliding After Outlook Lowered

HARTFORD, Conn. (AP) — Shares of managed care company Aetna Inc. continued to slide Wednesday, a day after the company lowered its 2009 earnings guidance and left some analysts wondering whether more reductions are possible.

The Connecticut-based insurer said Tuesday after the market closed that it now expects 2009 operating earnings to range between $3.55 and $3.70 per share. That's down from earlier guidance of $3.85 to $3.95 per share.

Aetna officials cited rising commercial medical costs and lower projected Medicare revenue for the lower guidance. They said the company has seen an abrupt trend since late last year in its commercial insurance, where members are using either more services or higher-value services that affect costs.

Aetna also said its Medicare revenue will come in lower than expected essentially because its membership base isn't as sick as the insurer originally thought. That means the company will receive lower government payments for Medicare.

Wachovia analyst Matt Perry downgraded Aetna's stock to "Market Perform" from "Outperform," and Credit Suisse analyst Gregory Nersessian dropped it to "Underperform" from "Neutral."