Aetna announced first-quarter 2015 operating earnings of $844.3 million, or $2.39 per share, a per-share increase of 21 percent over the first quarter of 2014.
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Net income for the first quarter of 2015 was $777.5 million, or $2.20 per share. Net income for the first quarter of 2015 includes $0.19 per share of net charges.
Operating earnings were $844.3 million for the first quarter of 2015 compared with $722.0 million for the first quarter of 2014. The 17 percent increase in operating earnings is primarily due to higher underwriting margins in Aetna’s Health Care businesses, partially offset by an increase in general and administrative expenses.
Net income was $777.5 million for the first quarter of 2015 compared with $665.5 million for the first quarter of 2014. Net income in all periods reflects net charges, which are detailed in the Summary of Results table.
Operating revenues were $15.1 billion for the first quarter of 2015 compared with $14.0 billion for the first quarter of 2014. The 8 percent increase in operating revenues is primarily the result of membership growth in Aetna’s Health Care businesses as well as higher Health Care premium yields. Total revenue was $15.1 billion and $14.0 billion for the first quarters of 2015 and 2014, respectively.
Operating expenses were $2.8 billion for the first quarter of 2015. The operating expense ratio was 18.4 percent and 17.8 percent for the first quarters of 2015 and 2014, respectively.
The increase in the operating expense ratio is primarily the result of increased investment spend to support Aetna’s growth initiatives and the inclusion of general and administrative expenses from our 2014 acquisitions, partially offset by continued execution of Aetna’s expense initiatives. The total company expense ratio was 18.7 percent and 17.5 percent for the first quarters of 2015 and 2014, respectively.
Pretax operating margin was 10.2 percent for the first quarter of 2015 compared with 9.5 percent for the first quarter of 2014. Pretax operating margins increased as a result of higher underwriting margins in Aetna’s Health Care businesses, primarily in the Government business. The after-tax net income margin was 5.2 percent and 4.8 percent for the first quarters of 2015 and 2014, respectively.
Effective tax rate was 43.2 percent for the first quarter of 2015 compared with 41.8 percent for the first quarter of 2014. The increase in the effective tax rate reflects the impact of health care reform, primarily from the 2015 increase in the non-deductible health insurer fee.
Share repurchases totaled 2.1 million shares at a cost of $196 million for the first quarter of 2015. ■