Aetna’s Shares Increased by 12.6% since Its Previous Earnings
Aetna is expected to release its 1Q15 earnings on April 28, 2015. Since the release of its 4Q14 earnings on February 3, 2015, the company’s shares rose by 12.6%.
Aetna (AET) projected that its total membership will remain flat at the 2014 levels. Its membership will be around 23.4 million in 1Q15.
Aetna will experience a drop in EBITDA margins in 1Q15. The drop is mainly due to the health insurance fee and commercial enrollment pressures.
The rise in Aetna’s EPS is mainly attributed to the increase in the company’s government-sponsored MA (Medicare Advantage) and Medicaid enrollments in 1Q15.
Aetna (AET) is one of the largest health insurance companies in the US. It has a total market capitalization of $37.6 billion.
UnitedHealth Group is acquiring Catamaran for a consideration of $12.8 billion. Increasing debt may reduce future net earnings and could affect the company’s valuation.
UnitedHealth Group’s medical cost ratio, which is the percentage of medical expenses to the premiums collected, fell by 1.4% on a year-over-year basis.
The Optum segment offers pharmacy, quality management, and health technology services. Operating earnings grew by 14% year-over-year to $742 million.
UnitedHealthcare grew its Medicare business by 3,80,000 new enrollees, with enrollments distributed almost evenly between MA (Medicare Advantage) and supplemental Medicare plans.
UnitedHealth Group (UNH) posted its 1Q15 earnings on April 16, 2015. Following the release, UnitedHealth Group’s share price increased by 3.6%.
Since UnitedHealth’s previous earnings release on January 16, the company’s shares have increased by 9.2%, from $106.50 to $119.50.
On March 30, UnitedHealth announced it will buy Catamaran for $12.8 billion. The market expects Catamaran’s shareholders to benefit from the merger.
On January 28, UnitedHealth chose Gilead’s Harvoni as its preferred drug for hepatitis C. Higher Harvoni revenues may indicate higher operating expenses.
UnitedHealth Group’s projected EPS for 1Q15 was less than projected for 4Q14. This was attributed to the increase in the health insurance fee in 2015.
UnitedHealth Group will release its 1Q15 earnings result on April 16, before the market opens for trading. Its share price has increased 9% since 4Q14.
Perrigo’s sales infrastructure was further enhanced with the acquisition of Omega Pharma that added 211,000 pharmacists, 105,000 retail stores, and 4,000 para-pharmacies to its network.
The Mylan–Perrigo entity would be geographically diversified across the US, Europe, and emerging markets. It would also have a well-diversified product pipeline to drive long-term growth.
Assuming 25% of the total deal is to be funded with debt, this would increase Mylan’s leverage ratio to around 4.6x. This would likely have a negative impact on Mylan’s investment-grade rating.
Pharmaceutical company Mylan’s (MYL) intention to acquire Perrigo became public on April 6, 2015. The acquisition would permit Mylan to expand into the over-the-counter drugs segment.
Mylan will benefit from Abbott’s commercial infrastructure that includes a workforce of 2,000 sales representatives as well as manufacturing units in Japan and France.
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