Hartford health insurer Aetna reported Thursday a 29 percent gain in its first-quarter profits, driven by lower medical costs.
The company earned $562.6 million, or $1.28 per share, compared to $437.8 million, or 95 cents per share, in the year ago period.
Aetna’s revenues remained fairly stable in the quarter reaching $8.62 billion, from $8.61 billion a year earlier.
“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,” said Ronald A. Williams, chairman and CEO of Aetna. “Lower medical costs for Aetna allow us to continue to invest in innovation and offer our customers greater value through more affordable products.
Analysts surveyed by Thomson Reuters expected a profit of 72 cents per share and revenue of $8.59 billion for the company, excluding one-time costs and gains, according to the Associated Press.
The third largest U.S. health insurer did see its enrollment fall to 18.7 million compared to 19.1 million in March 2009. The drop-off was felt mainly in the company’s commercial enrollment, a result of the high unemployment rate in the United States.
Aetna spent 82.5 percent of its premium revenue on medical care, down from 83 percent. A year ago Aetna struggled because medical costs were too high compared to its premiums. The company reported greater premium revenue in the first quarter due to higher rates, but its enrollment fell, according to the AP.
Aetna also raised its 2010 operating profit forecast  to between $2.75 to $2.85 per share, from a February forecast of $2.55 and $2.65 per share.
