Earnings Preview: Aetna

Aetna (AET) is expected to report Q2 earnings before market open Thursday, July 31, with a conference call scheduled for 8:30 am ET.

Guidance

Analysts are looking for a profit of 93c on revenue of $7.87B. The consensus is 93c to $98c for EPS, and revenue of $7.63B to $7.97B, according to First Call. During its analyst meeting the company reaffirmed its 2008 profit expectations of EPS $4.00. For Q1, Aetna reported EPS 92c in line with consensus and revenue in line at $7.7B.

Positive drivers for earnings are the company's geographic diversity and its 2007 acquisitions of Schaller Anderson and Goodhealth Worldwide. Negative possibilities to earnings include increased competition and rising medical costs.

Analyst Views

On July 8, Credit Suisse said it remains cautious on the Managed Care industry heading into Q2 earnings as it does not believe all the Medicare and Medicaid pressures have been fully "fleshed out yet." The price target was lowered for Aetna to $40.