Pressure on profit margins and increasing medical costs led Aetna Inc. to lower profit forecasts on June 2nd 2008. Analysts speculate that this will not be the last time that Aetna will have to do so.
Industry speculation concerning potential acquisitions increase health insurance shares across the board. Aetna's shares increased 14% with speculation of Humana acquisition
In a cost cutting effort in December of 2007, Aetna enacted a policy to reduce the benefits requiring an anesthesiologist’s involvement. Recently, the policy has been suspended, pending the approval of alternative sedation methods by the FDA.
Aetna released its earnings for the fourth quarter of 2007. Aenta's earnings of $0.88 per share on $7.1 billion in revenue was in line with Wall Street analysts. However, Aetna's projected revenue for the first quarter in 2008 fell short of the same Wall Street analysts, causing Aetna's stock price to sink.
AET had break the 53 $ line. It is like the ende of a cup-handle formation since Jan 2006. If AET go down 53, it was a fail breakout
Aetna completed the acquisition of Goodhealth Worldwide, a managing general underwriter for international private medical insurance. The acquisition will expand Aetna's global footprint in addition to providing Aetna with an intimate knowledge of strategic European benefit design for expatriate clients.
On July 25, New Jersey fined Aetna nearly $9.5 million for not properly covering patients' out-of-network expenses. On July 26, the company announced a 16% jump in second-quarter profits, wowing Wall Street. The same day, a group rallied outside Aetna's headquarters in protest of the rising costs of health care. Despite the cheery earnings report, the bad news, and poor market conditions that week, sent Aetna's stock price down almost $3.
Aetna cuts ambulance reimbursements, which ought to reduce cost and improve profitability. But the move may result in losing enrollment and revenue, especially Aetna is already profitable, with low medical expenses. Stock prices drop over 2% the following trading day.
Aetna announced its intention to purchase Medicare managing firm Schaller Anderson for about $535 million. Aetna's stock price fell on this news, as this represents a significant expenses that will take a bite out of short-term profits.
Aetna's first quarter earnings rose 8.2% from first quarter 2006, up to $434.6 million, or 81 cents/share, from $401.7 million, or 68 cents/share. As a result, the company raised its expected earnings-per-share for the year, sending the stock price higher as well.
Stocks around the world, including Aetna’s, traded much lower on news of a widespread selloff in the Chinese stock market. This day was termed “Grey Tuesday” by The Economist.