Aetna announced fourth-quarter 2009 operating earnings of $178.6 million, or $.40 per share compared to $.96 per share in the fourth quarter of 2008. The decrease in operating earnings per share from the prior-year quarter reflects a lower Commercial underwriting margin, lower operating earnings in the Group Insurance business and an increase in pension expense partially offset by the impact of a lower number of outstanding shares. The lower Commercial underwriting margin was due to a significant increase in Commercial medical costs which was partially offset by an increase in health care premiums. The lower Group Insurance operating earnings were due to lower disability underwriting margins from increased long-term disability reserves. Net income for the fourth quarter was $165.9 million, or $.38 per share.
Full-year 2009 operating earnings per share decreased 30 percent from full year 2008 to $2.75. Full-year 2009 net income was $2.84 per share, which was generally in line with 2008.
"As we worked through a very challenging 2009, we took significant actions to improve our operational performance and we are moving in the right direction," said Ronald A. Williams, chairman and CEO. "Entering 2010, a weak economy and high unemployment levels remain challenging, but we continue to implement strategic initiatives and actions that will help build positive momentum and give us confidence for the long-term future."
"Aetna enters 2010 in a strong financial position," said Joseph M. Zubretsky, executive vice president and CFO. "Our capital structure, liquidity and operating cash flows continue to be excellent. Given the ongoing challenges we expect to face, however, we view 2010 as a repositioning year that will not fully reflect the earnings potential of our business. We project our 2010 operating earnings per share to be in the range of $2.55 to $2.65."
Aetna is one of the nation’s leading diversified health care benefits companies, serving approximately 36.1 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labor groups and expatriates.
For more information, visit www.aetna.com .