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Aetna (AET) Q1 Earnings, Revenues Beat, Raises Outlook

Aetna Inc. AET is one of the largest commercial health and benefits insurers providing health insurance and related products. The company is due to acquire Humana Inc. and hence the combination of the two majors will create the second-largest managed

The company has a diversified revenue stream that helped it survive challenging industry environment.

Also over the years, Aetna has positioned itself well to accommodate in the changing industry by investing in information technology both by growing organically and making acquisitions.

Aetna also has an impressive earnings track record. The company delivered positive earnings surprises in each of the last four quarters with an average surprise of nearly 9%.

Currently, Aetna has a Zacks Rank #4 (Sell), but that could definitely change following the company’s earnings report which was just released. We have highlighted some of the key stats from this just-revealed announcement below:

The Bottom Line: Aetna beats estimates. The company’s operating earnings of $2.30 per share was way ahead of the Zacks Consensus Estimate of $2.22.

The Top Line: Revenues were ahead of our expectations. Aetna posted revenues of $15.7 billion, compared with our consensus estimate of $15.5 billion.

Key Stats: Medical membership was 23 million as of Mar 31, 2016. This represents a 2.9% year-over-year decline.

Total benefits and expenses were $14.4 billion up 5.1% year over year.

The operating expense ratio was 18% down from 18.4% in the year ago quarter.

Pretax operating margin was 9.5%, down 80 basis points year over year.

Guidance: Aetna expects earnings per share between $7.90 and $8.10 for 2016.

Check back later for our full write up on this AET earnings report later!

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