UPDATE 2-Aetna raised outlook, inks a deal with CVS pharmacy

Health Insurance Aetna Inc (AET.N) raised its full-year profit forecast on Tuesday, as it reported a jump of 42 percent in the second quarter net profit and announced a long-term agreement for CVS Caremark Corp. (CVS.N) to number of pharmacy benefits management.
Under 12-year contract, CVS will serve approximately 9.7 million Aetna pharmacy members and managing approximately $ 9.5 billion in annual drug spending. The No. 3 U.S. health insurer said it would take ownership of the pharmacy benefit business retained.
Some investors had hoped others would follow insurers WellPoint Inc. (WLP.N) that its pharmacy benefit unit sold to Express Scripts Inc. (ESRX.O) last year to $ 4.68 billion, in exhaust their benefit units drugs.
"I think it's a bit 'of a disappointment on the part of some who were looking for more of a full blown marketing thing," Collins Stewart analyst Brian Wright said the move Aetna.
He said he did not believe that a sale was likely.
Aetna Chief Financial Officer Joseph Zubretsky said the company evaluated all strategic options for arriving at the contract with CVS. The contract will Aetna to a network pharmacy CVS and the scale of the purchase access Zubretsky said.
"This was the best option available to us and the best company to work with" Zubretsky said in an interview.
OUTLOOK
Aetna 2010 earnings, excluding items, in a range of $ 3.05 to $ 3.15 per share predicted - up from $ 2.75 to 2.85 dollars per share previously expected.
Forecasts for the rest of the year seems to be "fair and reasonable, and not with a preponderance of caution," said Collins Stewart Wright.
The second-quarter net income rose to $ 491 million, or $ 1.14 per share, from $ 346.6 million, or 77 cents per share, a year earlier.
Excluding items, Aetna reported a profit of $ 1.05 per share, helped by 30 cents to take advantage of the positive claims reserves from prior periods left.
Amounting to a rate of 31 cents compared to the consensus estimate of 74 cents per share, according to Wright and analysts at Sanford Bernstein.
Revenues slipped about 1 percent to $ 8.55 billion, reflecting slightly lower membership of the commercial health plans.
Aetna spent 81.8 percent of premium revenues on medical costs in the quarter, a decrease of 86.8 percent a year ago. Zubretsky said the insurer is using much lower medical services seen.
Aetna in June, said second-quarter profit of exercise would be the consensus estimates of analysts, who at that time was 68 cents per share exceeded.
It is the second largest health insurer in the United States to report earnings this quarter, after UnitedHealth Group Inc. (UNH.N) placed much higher than expected earnings last week and raised its full-year forecast above Wall Street estimates. [ID: nN20214804]
Although analysts expect a strong season gains by insurers, enthusiasm for the industry to be tempered as investors question whether the performance will be sustainable under the new health care reform bill in the U.S..