Big health insurer to miss profit forecasts

Wednesday, July 19, 2000 | 11:39 a.m.

Aetna Inc., the nation's biggest health insurance company, said Tuesday that it would not meet second-quarter earnings forecasts because its health care costs were rising faster than expected. Surprised investors drove down Aetna's stock price.

Aetna said its second-quarter earnings would be 85 to 95 cents a share, well below analysts' estimates of $1.20 a share, according to First Call/Thomson Financial, which tracks company earnings.

The company said medical costs in its core commercial health maintenance organizations rose 10 percent to 12 percent in the second quarter as members spent more time in hospitals, emergency rooms, outpatient surgery centers and doctors' offices. It promised to provide more information on the problems when it reports quarterly earnings on Aug. 4.

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