UPDATE: Aetna's 4Q Earnings Up 73% On Light Health Usage

Aetna Inc.'s (AET) fourth-quarter earnings rose 73% as the health insurer continued to benefit from light medical costs amid a sluggish pace of patient visits to hospitals and doctors' offices.

This trend, brought on by the weak economy and high unemployment, fueled earnings gains and rising stock prices across the managed-care sector last year. Aetna in mid-December indicated it capped the year on a strong note by raising its 2011 guidance.

Analysts expect issues like the upcoming presidential election and Supreme Court ruling on the U.S. health-care overhaul law could be more influential drivers for health-insurance stocks this year. The industry has generally taken a cautious approach with 2012 guidance projections, although companies steadily hiked guidance through last year.

Aetna on Wednesday maintained its forecast--which it raised in mid-December--for operating earnings of about $5.00 per share this year, which is less than analysts were recently expecting.

Shares of the Hartford-based company rose 2.2% to $44.65 in premarket trading. The shares have risen more than 29% over the last 12 months through Tuesday's close.

The insurer reported a profit of $372.6 million, or $1.02 a share, up from $215.6 million, or 53 cents, a year earlier. Excluding items such as realized capital gains, transaction-related costs and severance, earnings rose to 97 cents from 63 cents. Revenue excluding capital gains and losses edged up slightly to $8.54 billion.

Analysts polled by Thomson Reuters had most recently forecast earnings of 97 cents on revenue of $8.5 billion.

Operating margin rose to 78.6% from 77.9%.

Aetna's total medical benefit ratio, or the amount of premiums used to pay patient medical costs, fell to 80.7% from 83% a year earlier and was up from 78.9% in the prior quarter.

The insurer has been making acquisitions lately as it diversifies its operations. Recent deals include buying Prodigy Health Group, an administrator of self-funded health-care plans, in June. In October, Aetna bought the account-based health plan administrator PayFlex Holdings Inc. and a Medicare supplement business with more than 150,000 members from Genworth Financial Inc. (GNW).

Joseph Zubretsky, Aetna's chief financial officer, noted in a release that the company expects to have $1.35 billion of deployable capital for this year. "In 2012 we are again looking for ways to enhance shareholder value through effective capital deployment," he said.

Aetna's total medical membership rose to 18.5 million from 18.23 million at the end of September. Membership was little changed compared with the tally at the end of 2010.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; [e-mail]

--Melodie Warner contributed to this article.