Health insurer Aetna Inc. AET reported first-quarter 2016 earnings of $2.30 per share comfortably beating the Zacks Consensus Estimate of $2.22. Earnings, however, were down 4% year over year. Lower operating earnings in Aetna's Group Insurance segment due to lower underwriting margins in its disability products led to the decline.Aetna Inc. (AET) Street EPS & Surprise Percent - Last 5 Quarters | FindTheCompanyNet income dropped 6% year over year to $2.06 per share.Behind the HeadlinesAetna’s operating revenues of $15.7 billion beat the Zacks Consensus Estimate of $15.5 billion, and increased 4% year over year. Revenue growth was primarily led by an increase in Health Care premium yields and membership growth in Aetna's Government business. However, lower membership in Aetna's group Commercial Insured products was a partial dampener.Total benefits and expenses were $14.4 billion, reflecting an increase of 5.1% year over year, primarily due to higher healthcare costs and higher interest expenses.The operating expense ratio was 18%, down 40 basis points year over year.Pretax operating margin was 9.5%, down 80 basis points year over year.Aetna ended the quarter with medical membership of 23.0 million, down 2.9% year over year. Lower membership in Commercial business was responsible for the deterioration.Segmental PerformanceAetna’s Health Care segment recorded operating revenues of $15 billion, up 4.2% year over year primarily on premium yields and membership growth in Aetna's Government business. This was somewhat offset by membership losses in Aetna’s Commercial insurance business.Operating earnings decreased 0.4% from the year-ago quarter to $832 million.Aetna’s Group Insurance operating revenues were down by 1.3% year over year to $608.8 million. Operating earnings plummeted 51.5% year over year to $21.3 million.At Large Case Pensions, operating revenues plummeted 23% year over year to $64.7 million due to a decline in investment income. Operating loss was $0.3 million in the reported quarter. In the year-ago quarter, the company had generated income of $2.1 million.2016 Guidance RaisedAetna now expects earnings per share between $7.90 and $8.10, up from of “at least $7.75”.Our TakeAetna has impressed investors by posting earnings ahead of its own estimates. The company continues to benefit from its diversified business profile and membership base.Moreover, the company is in the process of acquiring Humana Inc. HUM, which will likely be through by the second half of 2016. The combination of the two majors should be synergistic going ahead, as the new entity will command the position of the second-largest managed care company in the U.S.Zacks Rank & Peer PerformanceAetna carries a Zacks Rank #4 (Sell). Among the other players in the industry, UnitedHealth Group Inc. UNH and Anthem Inc. ANTM posted a positive earnings surprise each in the first quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AETNA INC-NEW (AET): Free Stock Analysis Report HUMANA INC NEW (HUM): Free Stock Analysis Report UNITEDHEALTH GP (UNH): Free Stock Analysis Report ANTHEM INC (ANTM): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research