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Health insurer Aetna's 3Q profit rises 4 pct

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The Associated Press | October 29, 2013 07:13 AM EST | AP

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Aetna Inc.'s third-quarter net income rose 4 percent, fueled in part by enrollment and revenue gains from a multi-billion-dollar acquisition the health insurer completed earlier this year.

But the Hartford, Conn., insurer's expenses also jumped, and its adjusted earnings slipped below Wall Street expectations.

Aetna said Tuesday that it earned $518.6 million, or $1.38 per share, in the three months that ended Sept. 30. That is up from $499.2 million, or $1.47 per share, a year ago, when Aetna had fewer shares outstanding.

Excluding items like integration-related costs, adjusted earnings totaled $1.50 per share. Total revenue soared 46 percent to $13.04 billion.

Analysts forecast higher earnings of $1.52 per share on about $12.87 billion in revenue, according to FactSet.

Aetna Inc. is the third largest health insurer based on enrollment, trailing only WellPoint and UnitedHealth. It also sells dental, group life and disability coverage.

Aetna closed a $6.9 billion acquisition of Medicare and Medicaid coverage provider Coventry Health Care in May, and that deal swelled both its revenue and enrollment figures for the quarter.

Aetna membership climbed 22 percent to more than 22 million people, compared to last year.

But health care costs — its largest expense — also jumped 57 percent to $9.16 billion, as profitability in its Medicare business declined.

Aetna reaffirmed its forecast for 2013 adjusted earnings that will range between $5.80 and $5.90 per share, guidance that it has already raised several times so far this year.

Analysts expect, on average, $5.90 per share.

Aetna shares closed at $61.78 on Monday and have climbed 33 percent so far this year.