HARTFORD, Conn. – Health insurance giant Aetna Inc. (AET) reported Thursday a 22 percent rise in fourth-quarter profits from a year ago, citing increased premiums and fees. It boosted its forecast for the year and its shares rose more than 4 percent.
Aetna said net income rose to $300.7 million, or $1.95 per share, in the last three months of 2004 from $249.5 million, or $1.56 per share during the same period a year earlier.
It said its operating income excluding gains from what the company described as a "favorable development of prior-period health care cost estimates," rose to $1.82 per share in the latest quarter from $1.32 a year earlier.
That beat the expectations of analysts surveyed by Thomson First Call (search), who were expecting earnings of $1.80 per share
Revenue were up 13 percent to $5.2 billion from $4.6 billion a year ago.
Aetna also boosted its forecast for 2005 to $8.75 to $8.90 per share. Analysts were expecting earnings of $8.51 per share.
Aetna said membership increased by 86,000 during the quarter to 13.7 million and predicted its membership would increase by about 1 million to 14.7 million this year. Premiums rose by 14.2 and fees increased 9.9 percent.
Aetna shares rose $5.72, or 4.5 percent, to $134.27 on the New York Stock Exchange (search), above its 52-week high of $131.65.
For all of 2004, net income rose to $2.2 billion, or $14.30 per share, from $933.8 million, or $5.91 per share. Revenue rose 11 percent to $19.9 billion from $18 billion.
"We are very pleased to have delivered on our commitments by every measure in 2004," said John W. Rowe, the company's chairman and CEO.
Also Thursday, the company said that its board declared a 2-for-1 stock split. On March 11, shareholders of record at Feb. 25 will receive one additional Aetna common share for each share held.