Research Desk Line-up: WellCare Health Plans Post Earnings Coverage
LONDON, UK / ACCESSWIRE / August 21, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Aetna Inc. (NYSE: AET), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=AET, following the Company's reporting of its second quarter fiscal 2017 operating results on August 03, 2017. The health insurer outperformed top- and bottom-line expectations. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Get more of our free earnings reports coverage from other constituents of the Health Care Plans industry. Pro-TD has currently selected WellCare Health Plans, Inc. (NYSE: WCG) for due-diligence and potential coverage as the Company reported on August 04, 2017, its financial results for Q2 2017 which ended on June 30, 2017. Register for a free membership today, and be among the early birds that get access to our report on WellCare Health Plans when we publish it.
At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on AET; also brushing on WCG. With the links below you can directly download the report of your stock of interest free of charge at:
http://protraderdaily.com/optin/'symbol=AET
http://protraderdaily.com/optin/'symbol=WCG
Earnings Reviewed
For Q2 2017, Aetna's total revenue and adjusted revenue were $15.52 billion and $15.50 billion, respectively, compared to $15.95 billion and $15.90 billion, respectively, for Q2 2016. The decrease in total revenue and adjusted revenue during the reported quarter was primarily due to lower premiums in Aetna's Health Care segment, including lower membership in Aetna's ACA compliant individual and small group products, and the temporary suspension of the health insurer fee ("HIF") in 2017. The Company's revenue number topped analysts' estimates of $15.3 billion.
Aetna's total company expense ratio was 16.4% and 17.5% for Q2 2017 and Q2 2016, respectively. The adjusted expense ratio was 16.5% and 17.1% for Q2 2017 and Q2 2016, respectively. The improvement in both ratios during 2017 was primarily due to the temporary suspension of the HIF in 2017 and the execution of Aetna's expense management initiatives, partially offset by targeted investment spending on Aetna's growth initiatives.
Aetna reported net income of $1.20 billion, or $3.60 per share, for Q2 2017 compared to net income of $791 million, or $2.23 per share, for Q2 2016. Aetna's adjusted earnings were $1.15 billion, or $3.42 per share, for the reported quarter compared to $783 million, or $2.21 per share, for the year ago same period. The substantial increase in adjusted earnings during Q2 2017 was primarily due to continued strong performance in Aetna's Health Care segment. The Company's earnings numbers exceeded Wall Street's estimates of $2.34 per share.
Health Care Segment Results
For Q2 2017, Aetna's Health Care segment's total revenue and adjusted revenue were $14.8 billion, each, compared to $15.2 billion, each, for Q2 2016.
Aetna's Medical membership at June 30, 2017, decreased by 358 thousand compared with March 31, 2017. The decrease primarily reflected declines in Aetna's Medicaid products primarily due to the exit of the Missouri Medicaid program during Q2 2017 and declines in Aetna's Commercial Insured products primarily due to lower membership in Aetna's ACA compliant individual and small group products.
Aetna's Days claims payable was 54 days at June 30, 2017, a sequential increase of one day compared to March 31, 2017, and a decrease of two days compared with June 30, 2016. The y-o-y drop was driven by a number of factors, including the operational maturation of new Medicaid contracts, decreased claims processing times and changes in business mix, primarily related to the decline in Aetna's individual Commercial product membership.
The segment's income before income taxes was $1.7 billion for Q2 2017 compared to $1.3 billion for Q2 2016. Pre-tax adjusted earnings were $1.8 billion for the reported quarter compared to $1.3 billion for the year ago corresponding period. The increase in both income before income taxes and pre-tax adjusted earnings was primarily due to continued strong performance across Aetna's core Health Care businesses.
Group Insurance Segment
Aetna's Group Insurance, total revenue was $642 million and $647 million for Q2 2017 and Q2 2016, respectively. Adjusted revenue was $627 million and $630 million for Q2 2017 and Q2 2016, respectively.
The Group Insurance segment's income before income taxes was $57 million for Q2 2017 compared to $74 million for Q2 2016. The division's pre-tax adjusted earnings were $42 million for the reported quarter compared to $57 million for the prior year's same quarter.
Large Case Pensions Segment
For Q2 2017, Large Case Pensions' total revenue was $81 million compared to $82 million for Q2 2016. The segment's adjusted revenue was $78 million for both Q2 2017 and Q2 2016.
Large Case Pensions' income before income taxes was $115 million for Q2 2017 compared to $135 million for Q2 2016. The decrease in income before income taxes was primarily due to a larger reduction of Aetna's reserve for anticipated future losses on discontinued products in 2016 compared to 2017. The segment's pre-tax adjusted earnings were $3 million for both Q2 2017 and Q2 2016.
Capital Metrics
Aetna's after-tax net income margin was 7.7% and 5.0% for Q2 2017 and Q2 2016, respectively. The adjusted pre-tax margin was 11.7% and 8.9% for Q2 2017 and Q2 2016, respectively. The improvement in both Q2 2017 ratios was primarily due to continued strong performance in Aetna's Health Care segment.
Aetna's total debt to consolidated capitalization ratio was 37.3% at June 30, 2017, compared to 53.6% at December 31, 2016. The total debt to consolidated capitalization ratio at June 30, 2017, reflected the repayment of approximately $11.6 billion aggregate principal amount of Aetna's senior notes during 2017.
Stock Performance
Aetna's share price finished last Friday's trading session at $154.45, marginally down 0.87%. A total volume of 1.78 million shares have exchanged hands. The Company's stock price rallied 9.26% in the last three months, 23.29% in the past six months, and 27.60% in the previous twelve months. Additionally, the stock surged 24.55% since the start of the year. Shares of the Company have a PE ratio of 33.69 and have a dividend yield of 1.29%. The stock currently has a market cap of $51.74 billion.
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