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Aetna Beats Estimates

It guides higher too.
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Updated from 6:27 a.m.

Aetna

(AET)

surged 6% early Thursday after the company beat third-quarter earnings targets and raised 2007 guidance.

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The Hartford, Conn., health insurer made $476 million, or 85 cents a share, for the quarter ended Sept. 30, up from the year-ago $373 million, or 62 cents a share. Operating earnings, excluding certain items, were 78 cents a share, 6 cents ahead of the Thomson Financial analyst consensus estimate.

Revenue rose 11% from a year ago to $6.3 billion, in line with the Wall Street estimate. Aetna said its commercial risk medical cost ratio improved to 79.3% and its medical cost trend moderated as well.

"Our strong year-over-year operating earnings growth of 34% is a direct result of Aetna's customer-focused operating structure and our disciplined approach to sustained profitable growth," said CEO Ronald A. Williams. "We are continuing to win in the marketplace by innovating to meet the needs of our customers, diversifying our earnings stream and operating more efficiently. We also continue to deploy capital to repurchase shares while strategically investing in our business for the future."

The company said it expects to make $3.26 a share for 2007, which is 15 cents north of the Thomson estimate.