(Reuters) - Health insurer Aetna Inc, which has agreed to be bought by CVS Health Inc, reported a better-than-expected first-quarter profit on Tuesday, largely due to lower medical costs.
U.S. drugstore operator CVS agreed in December to acquire Aetna for $69 billion seeking to tackle soaring healthcare spending through lower-cost medical services in pharmacies.
Aetna’s net income came in at $1.21 billion, or $ 3.67 per share, in the first quarter ended March 31, compared with a loss of $381 million, or $1.11 per share, a year earlier.
Excluding items, the company reported earnings of $3.19, ahead of analysts’ average estimate of $2.97, according to Thomson Reuters I/B/E/S.
Aetna said its medical loss ratio — the percent of premiums spent on claims — improved to 80.4 percent from 82.5 percent a year earlier.
The company said the ratio improved partly due to the insurer’s planed exit from Obamacare markets for 2018.
Total revenue rose to $15.34 billion from $15.17 billion.
Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta