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Aetna beats 1Q forecasts
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April 27, 2000: 10:56 a.m. ET
Company's new CEO says it is moving quickly on split-up, sale of units
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NEW YORK (CNNfn) - Aetna Inc., the nation's largest health insurer, posted a better-than-expected gain in first-quarter income Thursday, and said it is proceeding with plans to split up the company and sell noncore business units.
The company earned $184.0 million, or $1.29 per diluted share, from operations. Analysts surveyed by earnings tracker First Call had forecast $1.12 a share. A year earlier, earnings totaled $158.4 million, or $1.01 a diluted share.
Including special items, net income slipped to $169.4 million, or $1.19 a share, from $169.6 million, or $1.09 a share, a year earlier.
Revenue rose 39 percent to $7.9 billion, primarily due to the Prudential HealthCare acquisition.
 Chief Financial Officer Alan Weber told analysts he is comfortable the company will meet or exceed First Call's earnings forecasts of $4.85 a share for the year.
The Hartford, Conn.-based insurer rejected a $10 billion purchase offer last month from WellPoint Health Networks (WLP: Research, Estimates) and ING America Insurance, a unit of Dutch financial services concern Internationale Nederlanden Groep, and faces a shareholder suit as a result. Partly in response, the company said it would conduct a review of its businesses.
Aetna said Thursday that review has been completed and it is moving to split the company into separate health-care insurance and financial services units, as well as shed some divisions and cut operating costs.
"We are moving swiftly to complete the separation by the end of the year if possible, and to do so in a way that minimizes tax implications and delivers the most value to our shareholders," William Donaldson, the company's new chairman and CEO, told analysts and reporters in a conference call.
"We will likely have final decisions on some key issues within several weeks," he said, adding that other decisions will take "a bit longer."
"We are (also) making steady progress on the planned sale of certain international operations," Donaldson said. "We expect to reach some final decisions in this area over the next few months."
The company said it has begun to implement the first phase of a cost-reduction program.
Shares of Aetna (AET: Research, Estimates) gained 2-3/16, or 5.1 percent, to 58 in trading Thursday morning. 
-- from staff and wire reports
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