Aetna announced second-quarter 2015 operating earnings of $722.1 million, or $2.05 per share, a per-share increase of 21 percent over the second quarter of 2014.
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Net income for the second quarter of 2015 was $731.8 million, or $2.08 per share. Net income for the second quarter of 2015 includes $0.03 per share of net benefits.
Operating earnings were $722.1 million for the second quarter of 2015 compared with $610.0 million for the second quarter of 2014. The 18 percent increase in operating earnings is primarily due to higher underwriting margins in Aetna's Health Care segment, partially offset by an increase in general and administrative expenses.
Net income was $731.8 million for the second quarter of 2015 compared with $548.8 million for the second quarter of 2014. Net income in both periods reflects net benefits (charges), which are detailed in the Summary of Results table.
Operating revenues were $15.1 billion for the second quarter of 2015 compared with $14.5 billion for the second quarter of 2014. The 4 percent increase in operating revenues is primarily the result of higher Health Care premium yields as well as membership growth in Aetna's Government business partially offset by membership losses in Aetna's middle-market Commercial Insured products.
Total revenue was $15.2 billion and $14.5 billion for the second quarters of 2015 and 2014, respectively. Total revenue for the second quarter of 2015 includes approximately $110 million of net litigation-related proceeds.
Operating expenses were $2.8 billion for the second quarter of 2015. The operating expense ratio was 18.3 percent and 17.6 percent for the second 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 that outpaced the increase in operating revenue described above. The total company expense ratio was 18.4 percent and 17.9 percent for the second quarters of 2015 and 2014, respectively.
Pretax operating margin was 8.7 percent for the second quarter of 2015 compared with 7.6 percent for the second quarter of 2014. The pretax operating margin increased primarily as a result of higher underwriting margins in Aetna's Government business. The after-tax net income margin was 4.8 percent and 3.8 percent for the second quarters of 2015 and 2014, respectively.
Effective tax rate was 41.8 percent for the second quarter of 2015 compared with 40.8 percent for the second 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 0.9 million shares at a cost of $100 million for the second quarter of 2015. ■