Aetna on Thursday reported a nearly 8 percent increase in profits in the third quarter of 2016, due mainly to the company’s growth of government business and willingness to cut costs.
Aetna disclosed profits of $603.9 million, or $1.70 per share, for the third quarter, up 7.8 percent from the $560.1 million, or $1.59 per share, recorded in the year-ago period.
Shawn M. Guertin, Aetna executive vice president and chief financial officer, attributed the solid performance to a focus on managing general and administrative expenses, which he said have offset pressure from Affordable Care Act-compliant products. Aetna announced earlier this year that it was pulling out of most state insurance exchanges because of significant losses the company experienced from that business.
“Operating results in our government business in particular remain robust, and recently released data show that among peers Aetna has the highest percentage of Medicare members enrolled in plans with an overall 2017 rating of four stars or higher,” Guertin said.
The company also recently said it would cut back on a longstanding practice of allowing telework, offered voluntary early retirement and began reducing part of its workforce focused on state healthcare exchanges.
Mark T. Bertolini, Aetna chairman and CEO, said third-quarter results are “a testament to our long-term strategy, which we expect will drive solid operating results for the remainder of 2016 and beyond.”
Aetna said it expects 2016 earnings in the range of $7.95 to $8.05 per share by year’s end.
