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April 29, 2010
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However, excluding the effect of prior-period development, operating earnings came in at 77 cents compared to $1.01 in the first quarter of 2009 due to lower commercial underwriting margin and lower insured membership, partially offset by the lower number of outstanding shares.
Revenues (excluding capital gain/losses) during the quarter declined 1% to $8.5 billion, driven by a 1.4% decline in healthcare premium, partially offset by a 10% increase in net investment income.
Total medical membership declined 2% to 18.7 million at the end of the reported quarter compared to the year-ago period. Sequentially also, membership declined by 226,000. We note the same trend in the case of pharmacy and dental categories -- membership declined both sequentially and from the year-ago period. Sequentially, membership has come down by 603,000 to 10.410 million for the pharmacy segment and 108,000 to 13.95 million for the dental segment.
Aetna earns more than 90% of its revenues from the Health Care segment, which recorded revenues (excluding capital gain/losses) of $7.9 billion during the quarter, marginally down from $8.0 billion of the year-ago period. The other two segments -- Group Insurance and Large Case Pensions -- recorded revenues of $529.9 (up 0.5%) and $141.7 million (up 1.2%), respectively.
We are pleased to note the improvement in Medical benefit ratio (MBR). For the three groups taken together, MBR declined 50 basis points to 82.5%. While the MBR increased marginally to 87% (year-ago quarter: 86.8%) for Medicare members, it improved for both Commercial (81.1% compared to 81.7) and Medicaid members (85.9% compared to 90.7%).
Aetna also upgraded its outlook for 2010. The company projects full-year 2010 operating EPS in the range of $2.75 − $2.85 compared to the earlier projection of $2.55 − $2.65.
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