Aetna, Hartford, Conn., saw its profits more than double in the fourth quarter and boosted its 2004 earnings outlook, forecasting an enrollment rebound later this year. Net income reached $249.5 million, or $1.56 per share, in the quarter ended Dec. 31, up from $98.2 million, or 63 cents per share, in the year-ago quarter. Revenue dipped 2% to $4.6 billion. For all of 2003, Aetna reported net income of $933.8 million, or $5.91 per share, compared with a loss of $2.5 billion, or $16.49 per share, in 2002 when it took a massive charge related to changes in accounting for goodwill. Full-year revenue fell 10% to $18 billion. Enrollment declined 5% to 13 million members as the company continued to shed unprofitable clients. Aetna, however, said it expects to add 500,000 to 700,000 new members this year. It raised its 2004 per-share earnings outlook to between $6.25 and $6.35, well above analysts' average forecast of $6.02.
Meanwhile, Health Net, Woodland Hills, Calif., lowered its 2004 earnings forecast after announcing a doubling of its fourth-quarter profits. Net income for the quarter was $90.3 million, or 78 cents per share, up from $45.2 million, or 36 cents per share, in the year-ago quarter. Revenue rose 5% to $2.8 billion. Health Net did not provide full-year results, saying it was restating results for 2001, 2002 and the first three quarters of 2003 for adjustments relating to workers' compensation expenses, lease costs and other items. The company now expects 2004 per-share earnings of between $2.92 and $3.07, compared with its previous estimate of $3.08 to $3.11. -- by Laura B. Benko