Aenta (AET) posted stronger-than-expected operating earnings for the fourth quarter on Tuesday and said it is considering its legal options after a federal court blocked its $37 billion takeover of Humana (HUM) - Get Free Report .
Earnings for the three months ended in December were $578 million, or $1.63 a share, well ahead of analysts' forecasts of $1.44 and up nearly 19% from the same period last year. Revenue was $15.727 billion, the company said, up modestly from the fourth quarter of last year but narrowly shy of analysts' $15.84 billion forecast.
"Aetna's 2016 results exceeded previous projections despite continued challenges in the public exchanges, and I have a great deal of confidence in the company's future, including our long-term prospects for growth," said CEO Mark Bertolini. "As we consider next steps in our proposed acquisition of Humana, we remain focused on our core strategy to deliver innovative, consumer-centric solutions that improve quality, affordability and the overall member experience."
The company expects full-year operating earnings per share of at least $8.55 in 2017, but noted that while it is "considering its options for responding to the trial court's ruling in the Department of Justice litigation relating to the Humana Acquisition," its projections represent "a standalone scenario that assumes the termination of Aetna's merger agreement with Humana and Aetna's asset purchase agreement with Molina Healthcare (MOH) - Get Free Report ."
Aetna's attempt to buy Humana was blocked by a federal judge earlier this month on the grounds that it would likely "substantially lessen competition in markets for individual Medical Advantage plans and health insurance sold on the public exchanges." Aetna hasn't said whether it will appeal, and discussions of further plans for M&A will likely also be on tap for the company's post-earnings conference call.
Humana is expected to report earnings on Feb. 8. Analysts expect profit of $2.06 a share.
Aetna shares closed at $116.71 on Monday in New York, down 0.63%, trimming its three-month gain to 8.67%. Humana ended the session down 1.2% at $199.26.