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Aetna Third Quarter Earnings Preview
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AET
Analysts are expecting a drop in profit for Aetna (NYSE:AET) when it reports its results for the third quarter on Thursday, October 25, 2012. The company reported profit of $1.40 a year ago, but the current consensus estimate anticipates earnings per share of $1.34.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Earnings: Quality Means Everything
What to Expect: Aetna is expected to report earnings of $1.34 per share, down 4.3% from a year ago, when the company reported earnings of $1.40 per share.
For the fiscal year, analysts are expecting earnings of $5.07 per share.
Aetna is expected to report revenue of $8.96 billion for the quarter, beating last year's figure of $8.79 billion by 2%. For the fiscal year, expected revenue is $35.7 billion.
Company Performance: Aetna has reported revenue increases for the past four quarters. It increased 8.2% to $9.03 billion in the second quarter. Prior to that, the figure rose 5.6% in the first quarter, 3.1% in the fourth quarter of the last fiscal year and 2.9% in the third quarter of the last fiscal year.
The P/E ratio for AET is 8.6, below the industry average of 14.81. Companies with low P/E ratios may find it easier to surprise the market to the upside, even if their financial performance is not as strong as that of companies with high P/E ratios. A company's price/earnings ratio (P/E ratio) provides a measure of how expensive or cheap a stock is. To determine the P/E ratio, an investor divides the market price of the stock by the earnings-per-share (EPS) of the stock. SEE: The P/E Ratio: A Good Market-Timing Indicator
Over the past quarter, the stock price has increased from $37.07 on July 24, 2012 to $43.54. Aetna's best recent streak was when its price gained $2.28 per share between October 1, 2012 and October 4, 2012.
The Competition: Aetna is a health insurance company. It provides its customers, ranging from individuals to employer groups to governmental units, with traditional and consumer-directed health care benefits products and related services, such as medical, pharmaceutical, dental, behavioral health, group life, and disability plans. Analysts are optimistic about Aetna, with 10 of 18 assigning it a buy rating. This rating has been steady for the past three months.
The company's closest competitor in the insurance (accident and health) industry is UnitedHealth (UNH). Analysts are less optimistic about Aetna than about UnitedHealth. Fifteen out of 19 analysts rate the latter a buy.
Earnings are perhaps the single most studied number in a company's financial statements because they show a company's profitability. SEE: Earnings: Quality Means Everything
What to Expect: Aetna is expected to report earnings of $1.34 per share, down 4.3% from a year ago, when the company reported earnings of $1.40 per share.
For the fiscal year, analysts are expecting earnings of $5.07 per share.
Aetna is expected to report revenue of $8.96 billion for the quarter, beating last year's figure of $8.79 billion by 2%. For the fiscal year, expected revenue is $35.7 billion.
Company Performance: Aetna has reported revenue increases for the past four quarters. It increased 8.2% to $9.03 billion in the second quarter. Prior to that, the figure rose 5.6% in the first quarter, 3.1% in the fourth quarter of the last fiscal year and 2.9% in the third quarter of the last fiscal year.
Over the past quarter, the stock price has increased from $37.07 on July 24, 2012 to $43.54. Aetna's best recent streak was when its price gained $2.28 per share between October 1, 2012 and October 4, 2012.
The Competition: Aetna is a health insurance company. It provides its customers, ranging from individuals to employer groups to governmental units, with traditional and consumer-directed health care benefits products and related services, such as medical, pharmaceutical, dental, behavioral health, group life, and disability plans. Analysts are optimistic about Aetna, with 10 of 18 assigning it a buy rating. This rating has been steady for the past three months.
The company's closest competitor in the insurance (accident and health) industry is UnitedHealth (UNH). Analysts are less optimistic about Aetna than about UnitedHealth. Fifteen out of 19 analysts rate the latter a buy.
by
Investopedia Staff
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