Earnings Preview: Aetna

Aetna (AET) is expected to report Q3 earnings before market open Wednesday, October 29, with a conference call scheduled for 8:30 am.

Guidance

Analysts are looking for a profit of $1.12 on revenue of $7.92B. The consensus is $1.09 to $1.12 for EPS, and revenue of $7.74B to $8.11B, according to First Call. For Q2 Aetna reported EPS 94c verses consensus 93c, and revenue $7.83B verses consensus $7.87B. Positive drivers for Aetna's Q3 earnings are the company's geographic diversity and its acquisitions. Negative influences include rising unemployment, increased competition and higher medical costs.

Analyst Views

On October 14 Banc of America upgraded the managed care sector to Overweight from Equal Weight. Banc of America believes investment portfolio concerns are unwarranted and points out that the sector has underperformed since the financial crisis accelerated in September. Aetna is one of the the firm's top picks. On October 10, Oppenheimer noted that the managed care should not see major write downs in Q3.