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Aetna (AET) Reaffirms FY15 EPS Outlook

November 20, 2015 7:20 AM EST

On November 20, 2015, Aetna Inc. (NYSE: AET):

  • Reaffirmed its full-year 2015 operating earnings per share projection of $7.45 to 7.55;(1) and·

*** The Street is at FY15 EPS of $7.55.

Reported that its individual Commercial business has continued to perform in line with its projections through October 2015.

(1) Projected full-year 2015 operating earnings per share reflect approximately 353 million weighted average diluted shares. Projected operating earnings and projected operating earnings per share exclude from net income attributable to Aetna net realized capital losses of $15.6 million ($23.0 million pretax), transaction and integration-related costs of $96.5 million ($138.6 million pretax), and net litigation-related proceeds of $71.3 million ($109.6 million pretax), each reported by Aetna for the nine months ended September 30, 2015. Projected operating earnings and projected operating earnings per share also exclude from net income attributable to Aetna estimated after-tax amortization of other acquired intangible assets of approximately $166 million ($255 million pretax), which includes amortization of other acquired intangible assets of $124.8 million ($192.0 million pretax) reported by Aetna for the nine months ended September 30, 2015, projected transaction-related costs related to the proposed Humana acquisition and projected integration-related costs related to the Coventry Health Care, Inc. (“Coventry”), the InterGlobal group (“InterGlobal”), and bswift LLC (“bswift”) acquisitions, any future net realized capital gains or losses and other items, if any, that neither relate to the ordinary course of our business nor reflect our underlying business performance. Aetna is not able to project the amount of future net realized capital gains or losses or any such other items (other than estimated after-tax amortization of other acquired intangible assets, projected transaction-related costs related to the proposed Humana acquisition and projected integration-related costs related to the Coventry, InterGlobal, and bswift acquisitions) and therefore cannot reconcile projected operating earnings to projected net income attributable to Aetna or projected operating earnings per share to projected net income attributable to Aetna per share in any period. Although the excluded items may recur, management believes that operating earnings and operating earnings per share provide a more useful comparison of Aetna's underlying business performance from period to period. After-tax amortization of other acquired intangible assets relates to our acquisition activities, including Coventry, InterGlobal, and bswift. However, this amortization does not directly relate to the underwriting or servicing of products for customers and is not directly related to the core performance of Aetna’s business operations. Net realized capital gains and losses arise from various types of transactions, primarily in the course of managing a portfolio of assets that support the payment of liabilities. However, these transactions do not directly relate to the underwriting or servicing of products for customers and are not directly related to the core performance of Aetna's business operations. In addition, management uses operating earnings to assess business performance and to make decisions regarding Aetna's operations and the allocation of resources among Aetna's businesses. Operating earnings is also the measure reported to the Chief Executive Officer for these purposes. Non-GAAP financial measures we disclose, such as operating earnings and operating earnings per share, should not be considered a substitute for, or superior to, financial measures determined or calculated in accordance with GAAP.



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