NEW YORK (Reuters)—Health insurer Aetna Inc. on Thursday said third-quarter earnings from continuing operations rose 25% on cost controls and a boost in membership.
Aetna also lifted its 2005 profit forecast and said next year's results would track ahead of current analysts' estimates.
"We really have strong momentum in the marketplace," Aetna President Ronald Williams told Reuters. "Customers and our members are benefiting from our ability to control medical cost and quality."
Aetna said earnings rose to $377.8 million, or $1.26 per share, compared with earnings from continuing operations of $302.3 million, or 96 cents per share, a year earlier.
Year-earlier results excluded a $990 million gain related to a delayed tax refund from the sale of a property casualty business in 1996. Including the gain, year-earlier net income was $1.29 billion, or $4.10 per share. Revenue rose 13% to $5.7 billion.
Aetna said health plan membership rose 8% to 14.7 million members.
Compared with the second quarter, membership rose by 215,000, with the company's mid-size and smaller accounts leading the way. Aetna also added 220,000 members to its pharmacy benefit plans and 55,000 to dental plans.
"Our membership growth is strong across all of our segments and all of our regions," Williams said.
Medical healthcare costs remained stable in the quarter for its commercial business, the company said.
Investors are watching to see whether Aetna is interested in acquisitions after its two larger peers—UnitedHealth Group Inc. and WellPoint Inc.—recently announced major takeovers.
Williams said Aetna's acquisition strategy involves obtaining new technology or capabilities, such as recent deals giving it access to students or part-time workers, or gaining membership in certain geographic regions.
Aetna said Wednesday it plans to acquire all the stock it does not already own in Aetna Specialty Pharmacy, a joint venture it formed last year with Priority Healthcare Corp.
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