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Aetna tops lower forecast
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August 4, 2000: 8:03 a.m. ET
Largest health insurer says rising health-care costs hurt 2Q profit
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NEW YORK (CNNfn) - Aetna Inc., the nation's largest health insurance company, beat lowered second-quarter earnings estimates Friday.
The company, which agreed earlier this month to sell its international and financial services units to Dutch financial concern ING Groep NV, reported earnings of $134.0 million, or 94 cents a diluted share.
 "These results, while disappointing, are in line with our announcement on July 18," Chairman and CEO William Donaldson said.
Analysts surveyed by earnings tracker First Call forecast the company would earn 88 cents a share, but that estimate has fallen steadily in the last two months from as high as $1.21 a share.
Including special items, net income came to $186.4 million, or $1.30 per share, compared with $217.5 million, or $1.43 per share, a year earlier.
A year earlier, total earnings were $160.9 million, or $1.03 a diluted share. The company said higher-than-anticipated medical costs accounted for the thinner profits. But it said it increased prices for renewal business in the fourth quarter and beyond to reflect higher medical costs, and that it is looking to exit other businesses that do not meet profitability or strategic targets.
Revenue rose to $8.1 billion from $5.9 billion. Premiums rose to $6.8 billion from $4.6 billion, due mostly to the inclusion of the recently acquired Prudential HealthCare unit. That and the increase in fees overcame a $50.5 million capital loss that reduced its revenue number.
For the first half, net income came to $355.8 million, or $2.49 a diluted share, down from $387.1 million, or $2.53 a share, a year earlier. Excluding special charges, earnings per share improved to $2.23 in the first half from $2.05 a year earlier. Year-to-date revenue rose to $16.0 billion from $11.6 billion.
Shares of Aetna (AET: Research, Estimates) gained 1 to 58-5/16 in trading Thursday. 
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ING wins race for $7.7B Aetna units - July 20, 2000
Aetna warns on 2Q profits, stock drops - July 18, 2000
Deal talk provides cure for Aetna's stock - June 1, 2000
Aetna beats 1Q forecasts - April 27, 2000
Aetna defends rejection of $10B offer, stock drops - March 13, 2000
WellPoint, ING offer $70 per share to buy Aetna - March 1, 2000
Aetna CEO resigns - Feb. 25, 2000
Aetna tops 4Q target, but stock reels - Feb. 8, 2000
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