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Aetna profit misses estimates on low Medicare margins

By Bloomberg  
   February 07, 2014

Aetna Inc., the third-biggest U.S. insurer, reported earnings that missed analyst estimates as Medicare costs were higher than expected. Fourth-quarter earnings excluding one-time items of $1.34 a share missed by 2 cents the average of 14 analyst estimates compiled by Bloomberg. Net income almost doubled to $368.9 million, or $1 a share, from $190.1 million, or 56 cents, a year earlier, Hartford, Connecticut-based Aetna said today in a statement. Medicare costs as a percentage of premiums, known as medical-loss ratio, rose to 87.9 percent from 85.6 percent a year earlier, in part because of "underperformance in two specific Medicare product offerings," Aetna said.

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