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Key Takeaways from Aetna’s 1Q15 Earnings Release

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Apr. 30 2015, Published 10:24 a.m. ET

1Q15 earnings overview

Aetna (AET) posted its 1Q15 earnings on April 28, 2015. The company posted $2.30 EPS (earnings per share), beating Wall Street EPS estimates of $1.94. In 1Q15, Aetna registered revenues and net income of $15.1 billion and $803.2 million, respectively.

After the company’s 1Q15 earnings announcement, Aetna’s share price increased by 3.2%.  Compared to 1Q14, Aetna’s revenues in 1Q15 rose by 8%, while net income increased by 17.8%. Aetna attributes this performance to its membership reaching 23.7 million members, an increase of 120,000 members in 1Q15. The enrollment growth was supplemented by the company’s strong pricing strategy leading to solid top line growth.

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Updated 2015 guidance

Based on its strong 1Q15 earnings, Aetna has updated its guidance for the year 2015. The company has projected its full year 2015 operating revenue in the range of $61 billion to $62 billion. Total enrollments, however, are expected to remain at 1Q15 levels of 23.7 million since increasing government membership over the remaining year is expected to be offset by a decline in the company’s commercial business.

In 2015, government-sponsored enrollments are also expected to boost performances of other companies in the health insurance industry (XLV) such as UnitedHealth Group (UNH), Humana (HUM), and Cigna (CI).

Aetna also raised its operating EPS projection for 2015 to $7.20–$7.40 per share, from the previous projection of at least $7.

About the company

Aetna is one of the largest health insurance companies in the United States, with a market capitalization of $38.6 billion. To know more about the company, read Aetna: An Analysis of the Health Insurance Giant.

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