Despite the fact that the insurer has seen a strong close to 2015, its predictions aren’t as strong as Wall Street’s.
The Aetna insurance company has closed 2015 with a very strong surge in its last quarter earnings, which rose by 38 percent when compared to its previous quarter.
Even though its performance was better than predicted, its 2016 guidance has fallen short of Wall Street’s forecast.
The insurance company is the third largest health insurer in the United States. Earlier this week, it announced that it is predicting adjusted earnings of a minimum of $7.75 per share in 2016. That said, Wall Street analysts had been setting their sights on per-share earnings that would be closer to $8.05, according to a FactSet poll. The data firm’s poll revealed that despite the strong earnings from the insurance provider, it will still fall short of the predictions that have been made for it.
In 2015, the Aetna health insurance company had recorded adjusted earnings of $7.71 per share.
Now, in the insurance provider’s initial guidance for 2016, it is taking into account a predicted drop in commercial health insurance enrollment during the first quarter of the year. It also expects that there will be a slight increase in the costs trends in medical care. These, among other factors, are what has led the company to make predictions of a lower per-share price than what had been forecasted by analysts.
The insurer also said that it was preparing for an improvement in its overall performance for 2016 within its Affordable Care Act related business. Health insurance providers have been facing certain challenges in the business they have built through the insurance exchanges, which provide consumers with subsidies based on their income in order to offer an incentive to purchase more affordable coverage.
The CEO of the insurance company, Mark Bertolini, explained that the despite the fact that Aetna has lost money on its ACA business, it has not yet reached the point that it would be worthwhile to give up altogether on what is, in actuality, not a very large portion of its complete portfolio.