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Aetna CEO: Government Reimbursements Added Little to Profits

Thursday, 26 Apr 2007 | 2:17 PM ET

Ronald Williams, chairman and chief executive officer of Aetna , said meeting the needs of its private customers –- not government reimbursements –- boosted first-quarter earnings.

Aetna Earnings
The health insurer reports a solid rise in first quarter profit, due to increased enrollment, and Ronald Williams, Aetna chairman & CEO, discusses his company's performance with CNBC's Liz Claman

“While we believe that serving the government programs and, in particular, the Medicare program is important, of our total of 15.7 million members, we have only about 400,000 or so in the Medicare drug program and about 160,000 in Medicare Advantage program,” Williams said.

Aetna reported first quarter earnings of 81 cents a share, beating Wall Street’s consensus estimate of 77 cents. The company expects to earn $3.35 a share this year, up from prior guidance of $3.30 a share.

Revenue increased 7% to $6.7 billion in the first quarter of 2007, up from $6.2 billion for the same period a year ago. Medical membership increased 270,000 to 15.7 million.

“We’re growing in our middle market business and we’re growing in our national account business,” Williams said. “The heart of our business is the commercially insured.”

Aetna recently announced a partnership with AARP. Williams has called the deal a “tremendous market opportunity … to increase access to healthcare for millions of Americans aged 50 to 64.”

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