Aetna 4th Quarter Earnings

Aetna Reports Fourth-Quarter and Full-Year 2008 Results

HARTFORD, Conn.--(BUSINESS WIRE)--Feb. 12, 2009-- Aetna (NYSE: AET):
>Fourth-quarter 2008 operating earnings per share increased 9 percent to $0.96
>Full-year 2008 operating earnings per share increased 13 percent to $3.93
>Net income per share decreased 52 percent in the fourth quarter 2008 to $0.42 per share and decreased 18 percent to $2.83 per share for the full year. Net income includes net realized capital losses and other items, which are excluded from operating earnings
>Medical membership totaled 17.7 million members at December 31, 2008; representing an annual growth of 848,000 and a quarter-over-quarter growth of 33,000
>Aetna projects 2009 operating earnings per share of $3.85 to $3.95. Excluding a projected $0.54 per share year-over-year increase in pension expense, operating earnings per share growth is projected to be 12 to 14 percent over 2008

Aetna (NYSE: AET) today announced that fourth-quarter 2008 operating earnings per share, (1) which exclude net realized capital losses and other items, increased 9 percent to $0.96. Full-year 2008 operating earnings per share increased 13 percent to $3.93. The increase in operating earnings per share reflects significant growth in revenue, solid underwriting results and continued operating expense efficiencies, partially offset by lower net investment income. Operating results also benefited from share repurchases and the full-year impact of recent acquisitions. The company’s 17 percent growth in full-year health care revenue was driven by premium rate increases and medical membership growth in both core and newer customer segments. Total health care revenue, including realized capital losses, grew by 16 percent for the full year.
Net income, which includes net realized capital losses and other items, was $0.42 per share for the fourth quarter of 2008, 52 percent lower than the prior-year quarter, due to net realized capital losses of $0.42 per share and the previously announced severance and facility charge and contribution for the establishment of a new out-of-network pricing database of $.08 and $.04 per share, respectively. Full-year 2008 net income was $2.83 per share, 18 percent lower than 2007, primarily due to net realized capital losses of $.99 per share. The majority of the net realized capital losses resulted from declines in the market value of debt securities in the company’s investment portfolio as a result of the widening of credit spreads in 2008.