May 1, 2018 / 10:59 AM / a year ago

Health insurer Aetna quarterly profit beats estimates

FILE PHOTO: Logos of CVS and Aetna are displayed on a monitor above the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 5, 2017. REUTERS/Lucas Jackson/File Photo

(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

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