Updated from 8:44 a.m. EDTAetna's ( AET) earnings fell 1% from a year ago in the second quarter and matched Wall Street forecasts when various items are excluded. The shares tanked, however, as the health insurer cut membership guidance. Aetna earned $389.5 million, or 67 cents a share, in the quarter, compared with $394.9 million, or 65 cents a share, a year ago. Adjusted for investment items and a reserve, Aetna earned 64 cents a share in the most recent period, matching the Thomson First Call estimate. Second-quarter revenue rose 14% from last year to $6.3 billion, beating estimates. For 2006, Aetna said it now sees overall membership growth of 700,000 to 750,000, down from its old guidance of 900,000 to 1 million. That spooked investors and sent the stock down nearly 14% ahead of the bell. Aetna put third-quarter operating earnings at 72 cents a share and full-year operating earnings at $2.77 to $2.79 a share. Analysts were looking for 72 cents a share in the quarter and $2.75 a share in the year. Shares of Aetna were plunging $7.94, or 19.9%, to $32.02 in heavy trading. The lowest close for the last year is $34.83. Regarding the second quarter, Aetna said profit margins rose as operating expenses as a percentage of revenue fell to 18.4% from 19.7% a year ago. "Despite these very strong financial results, certain areas of our business did not meet our expectations," the company said. "These included a large government case and our Stop-Loss product, which were particularly impacted by higher-than-expected large claims; and our Small Group customer market, where we experienced heightened competitive pressures in certain geographic areas. These factors contributed to a higher overall Commercial Risk medical cost ratio of 81.4%, excluding development. We are taking specific corrective actions to address these issues. "To be clear, we continue to believe that the outlook for Aetna and the industry overall remains bright, and that we are not seeing a change in fundamental dynamics. Our MCR, although higher, continues to be very competitive within our industry. And the flexibility of our operating model and active management allow us to meet challenges in the health care environment and still deliver positive results," it said.