Including charges totaling $381.9 million, the company posted a fourth-quarter operating loss of $353.2 million, or $2.49 per share. These charges relate to the write-off of goodwill mostly associated with Medicare market exits, restructuring plans announced in December and change-in-control costs related to the sale of its international and financial services businesses to Dutch financial services giant ING Groep NV last month.
With the sale, Aetna, one of the oldest U.S. insurers, became purely a health insurer. Its business now consists of health care, including dental, group insurance and related benefits, as well as a large case pensions unit.
Including discontinued operations, which comprise those businesses sold to ING, Aetna reported a net loss of $406.3 million, or $2.87 per common share, for the fourth quarter. This reflects a loss of $372.0 million, or $2.63 per common share, from continuing operations as a result of previously mentioned charges and the loss of $34.3 million from discontinued operations. The net loss compares with net income of $134.4 million, or 92 cents a common share, for the fourth quarter 1999.
Since the sale, Aetna has taken aggressive steps to tackle problems in its health insurance business, including plans to cut 5,000 jobs, or 13 percent of its work force.
Aetna, which has posted sluggish financial growth recently even as its managed care peers have enjoyed robust profits amid premium price increases, said the medical loss ratio in its Medicare HMO business was 97.5 percent in the quarter, significantly higher than in the prior-year period.
Aetna's total health membership stood at 19.3 million as of Dec. 31, a 6 percent decline during the year, the company said. Membership increased by 81,000 from the third quarter of 2000, but is expected to decrease overall in 2001 due to largely planned attrition at the company's Prudential Health Care business and Medicare HMO and commercial HMO product market exits. BACK TO TOP
Hershey Foods Posts Sweet Earnings On Strong Holiday Sales
Hershey Foods, the largest U.S. chocolate maker, said today its fourth-quarter earnings per share rose 20 percent, beating Wall Street's estimates, on increased sales.
The Hershey, Pa., maker of Hershey bars, Hershey Kisses and Reese's candies, said net income for the period rose to $116 million, or 84 cents per diluted share, from $98 million, or 70 cents a share, in the year-ago period.
Hershey, which has been expanding its product offerings with different sizes and flavors of old favorites, was expected to earn 82 cents a share, based on a recent poll of analysts by First Call/Thomson Financial.
Sales rose to $1.19 billion from $1.11 billion, boosted by strong sales around the Halloween and Christmas holidays.
The stock has outperformed the Standard & Poor's 500 Index by nearly 50 percent in the past 12 months. BACK TO TOP
Procter & Gamble's Core Profit Rises
Household products maker Procter & Gamble said today second-quarter profit rose 4 percent before unusual charges, beating Wall Street forecasts, as price increases, tax gains and the divestiture of its Clearasil business offset higher raw material costs.
The Cincinnati, Ohio-based maker of Tide laundry detergent, Crest toothpaste and a host of other products also said it was comfortable with the high end of analysts' earnings estimates for the full fiscal year.