Aetna earnings jump on growth in Medicare, Medicaid health plans

U.S. health insurance giant Aetna (AET) beat Wall Street forecasts Monday as the company reported higher fourth-quarter profits and reaffirmed plans to complete its acquisition of smaller rival Humana this year.

The Hartford, Conn.-based company credited the results in part to growth in membership and premiums as Aetna boosted its government business that sells Medicare and Medicaid health plans to U.S. consumers.

However, Aetna tempered investor expectations with a lower than expected forecast for 2016 earnings.

The company said net income for the Oct.-Dec. quarter rose 38% to $320.8 million, or 91 cents a share. That was up from $232 million, or 65 cents a share,  for the same period last year.

Operating earnings per share were $1.37, topping the $1.22 consensus forecast of financial analysts surveyed by S&P Capital IQ. Aetna reported total revenue of $15.05 billion, higher than the $14.94 billion expected in the analyst survey.

Shares of  Aetna closed up 1.5% at $103.37 in Monday trading.

The company is working with the Department of Justice and state regulators for its planned $37 billion acquisition of Louisville, Ky.-based Humana, and has obtained seven of the needed state approvals for the deal, said Aetna Chairman and CEO Mark Bertolini in a statement issued with the earnings announcement.

"We believe we remain on track to close the transaction in the second half of 2016," he said.

Aetna, Humana CEOs say deal bolsters Medicare, Medicaid businesses

Bertolini and Chief Financial Officer Shawn Guerton hailed the financial results, saying the reflected continued focus on pricing and execution of Aetna's growth strategy. The company is the nation's third-largest health insurer and is expected to grow if it completes the Humana deal.

Nonetheless, the executives projected 2016 operating earnings per share of at least $7.75 — below the $8.06 per share consensus estimate of analysts surveyed by S&P Capital IQ.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc.