Health insurer Aetna quarterly profit beats estimates

Getty Images

Aetna chairman and CEO Mark Bertolini speaks during the Fortune Global Forum on November 3, 2015 in San Francisco, California.

Health insurer Aetna, which has agreed to be bought by CVS Health, reported a better-than-expected first-quarter profit on Tuesday, largely due to lower medical costs.

U.S. drugstore operator CVS agreed in December to acquire Aetna for $69 billion seeking to tackle soaring healthcare spending through lower-cost medical services in pharmacies.

Aetna’s net income came in at $1.21 billion, or $ 3.67 per share, in the first quarter ended March 31, compared with a loss of $381 million, or $1.11 per share, a year earlier.

Excluding items, the company reported earnings of $3.19, ahead of analysts’ average estimate of $2.97, according to Thomson Reuters I/B/E/S.

Aetna said its medical loss ratio the percent of premiums spent on claims improved to 80.4 percent from 82.5 percent a year earlier.

The company said the ratio improved partly due to the insurer’s planned exit from Obamacare markets for 2018.

Total revenue rose to $15.34 billion from $15.17 billion.