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Aetna reports $1bn profit in 3Q ahead of takeover by CVS Health

A combination of corporate tax cuts and a pick-up in Aetna’s Medicare business drove Aetna’s per-share earnings to $2.96 per share on an adjusted basis, which beat the consensus estimate of $2.83
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CVS Health is acquiring Aetna in a $69bn takeover, which has been approved by the Department of Justice

The insurer Aetna (NYSE:AET) reported a profit of $1 billion in its third quarter and came in ahead of Wall Street’s estimates as it prepared for its take over by the drug store chain CVS Health.

A combination of corporate tax cuts and a pick-up in Aetna’s Medicare business drove Aetna’s per-share earnings to $3.03 per share, or $2.96 per share on an adjusted basis, which beat the consensus estimate of $2.83.

Its revenue, meanwhile, jumped 3% from last year to $15.5 billion, which also zipped past Wall Street’s expectation of $15.29 billion.

The country’s third-biggest insurer took a $130m pre-tax charge in the quarter that stemmed from an unfavorable arbitration ruling related to its departure from the Affordable Care Act’s insurance exchange marketplaces.

READ: CVS Health to buy Aetna for US$69bn amid rumours Amazon will move into pharmaceuticals

CVS Health is acquiring Aetna in a $69bn takeover, which is set to be finished prior to the end of the year. The merger got the go-ahead from the Department of Justice earlier this month after the pair of companies moved to address regulators’ concerns about the deal.

“Our combination with CVS Health will drive the next phase of Aetna’s growth and accelerate our opportunity to help transform the health care system,” noted Aetna CEO Mark Bertolini in a statement.

Aetna shares rose slightly in Tuesday's morning trade to hit $196.27.

Contact Ellen Kelleher at [email protected]



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