NEW YORK (Reuters) - Aetna Inc posted better-than-expected first-quarter profit on Thursday as the health insurer spent less premium revenue on medical costs, and it raised its full-year forecast.
Aetna is the latest health insurer to easily top profit expectations this quarter, although worries over the implementation for health reform has held back investor enthusiasm.
The No. 3 U.S. health insurer has advised investors that 2010 will be a "repositioning year," which it has said partly involves pricing its commercial plans to reflect increased medical costs that dragged down results in 2009.
Quarterly net income rose to $562.6 million, or $1.28 per share, from $437.8 million, or 95 cents per share, a year earlier.
Excluding a gain tied to a legal settlement, earnings were 98 cents per share. Excluding a further benefit from unused claim reserves, profit was 77 cents. Analysts on average expected 72 cents, according to Thomson Reuters I/B/E/S.
Revenue edged up to $8.62 billion.
The company spent 82.5 percent of premiums on medical costs, down from 83.0 percent a year earlier. In its commercial business including employer-based plans, that percentage dipped to 81.1 percent from 81.7 percent.
"Our first-quarter operating results reflect the impact of the significant actions we have taken to improve our performance, as demonstrated by the better-than-expected commercial medical benefit ratio," Aetna Chief Executive Officer Ron Williams said in a statement.
The company's enrollment stood at 18.69 million at the end of March, down about 2 percent from a year ago.
Aetna projected full-year operating earnings of $2.75 to $2.85 per share, up from a prior range of $2.55 to $2.65.
The company said in March that it expected first-quarter operating earnings to top the consensus Wall Street forecast, which was 66 cents per share at the time, although the company maintained its full-year outlook.
UnitedHealth Group Inc
(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn)
