Aetna profit beats Wall Street view, shares rise

By Lewis Krauskopf

NEW YORK (Reuters) - Aetna Inc (AET.N: Quote, Profile, Research, Stock Buzz) posted a better-than-expected third-quarter profit on Thursday as membership increased, and the health insurer projected next year's earnings would grow faster than Wall Street expected.

Shares rose more than 3 percent after the No. 3 U.S. health insurer also lifted its enrollment forecast for this year and continued to reassure investors about its medical cost trends.

Aetna shares have risen 27 percent this year, outperforming most large rivals.

"Aetna needed solid (third-quarter) results to ... prove that its momentum in the first half was sustainable, and it looks like it got them," Bank of America analyst Joseph France said in a research note.

The company is enrolling more members in its Medicare health plans, where it has a smaller presence than other insurers, as well as adding enrollees among students, and through contracts with governments and unions.

Third-quarter net income rose to $496.7 million, or 95 cents per share, from $476.4 million, or 85 cents per share, a year earlier.

Excluding net realized capital losses, operating earnings were 97 cents per share, 6 cents ahead of the analysts' average forecast, according to Reuters Estimates.

Revenue rose 11 percent to $6.96 billion.