In its second-quarter earnings announcement, Aetna reported $1.2 billion in net income compared to $791 million in the second quarter of 2016. Aetna also saw $1.1 billion in adjusted earnings in the quarter compared to $783 million last year.
In response to the strong numbers, Aetna raised its full-year earnings outlook. Analysts projected $8.89 per share, but Aetna raised it to between $9.45 and $9.55. Only three months ago, Aetna projected earnings of at least $8.80 per share.
It wasn't all positive news. Aetna also reported a 2.5% decrease in revenue, down from $16 billion a year ago to $15.5 billion this year.
Aetna said lower enrollment in Affordable Care Act (ACA) plans and small group products as well as the temporary suspension of the health insurer fee this year were the reasons for the revenue drop.
Aetna’s medical membership went down by 358,000 in the second quarter, after the company left the Missouri Medicaid program and reduced its ACA offerings. Aetna’s medical membership stood at 22.1 million at the end of the second quarter.
For its healthcare offerings, Aetna reported $1.7 billion in income before taxes compared to $1.3 billion last year.
Aetna's earnings report is the latest in a series of strong second-quarter results for large payers. Over the past two weeks, Humana beat its earnings predictions, Anthem posted strong results and UnitedHealth announced that its revenue grew 8% from last year.
The large payers have experienced positive results in different ways. UnitedHealth's Optum's earnings increased 21%, Humana found success in the Medicare Advantage market and Anthem benefited from premium rate increases and higher enrollments.
Aetna’s second-quarter results are an improvement on the first quarter. Aetna announced a $381 million first-quarter loss earlier this year, which it blamed on the failed merger with Humana. A federal judge blocked the plan because of competition issues in the Medicare Advantage and ACA plan markets; the two companies dropped the merger the following month. Aetna needed to pay a $1 billion a contractual breakup fee to Humana, which Aetna said resulted in a poor first quarter.
That's just one piece of what has been an eventful year for Aetna. In addition to the failed merger and poor first quarter, the company announced it's moving its corporate headquarters and 250 jobs to New York and pulling out of its remaining 11 ACA markets in 2018, having lost $500 million on individual insurance since 2014.
That decision rankled the Allegheny County Employees’ Retirement Fund, which filed a lawsuit against Aetna, claiming the Hartford, Conn.-based payer pulled out in retaliation for the failed Aetna-Humana merger.