The 10-second takeaway
For the quarter ended June 30 (Q2), Aetna missed estimates on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded significantly. GAAP earnings per share grew significantly.
Margins contracted across the board.
Aetna logged revenue of $11.54 billion. The 12 analysts polled by S&P Capital IQ hoped for revenue of $11.99 billion on the same basis. GAAP reported sales were 31% higher than the prior-year quarter's $8.84 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.52. The 17 earnings estimates compiled by S&P Capital IQ predicted $1.40 per share. Non-GAAP EPS of $1.52 for Q2 were 16% higher than the prior-year quarter's $1.31 per share. GAAP EPS of $1.64 for Q2 were 24% higher than the prior-year quarter's $1.32 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 25.9%, 180 basis points worse than the prior-year quarter. Operating margin was 8.1%, 50 basis points worse than the prior-year quarter. Net margin was 4.6%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $12.98 billion. On the bottom line, the average EPS estimate is $1.59.
Next year's average estimate for revenue is $47.52 billion. The average EPS estimate is $5.81.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 608 members out of 659 rating the stock outperform, and 51 members rating it underperform. Among 227 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 218 give Aetna a green thumbs-up, and nine give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Aetna is outperform, with an average price target of $67.65.
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