- The Washington Times - Tuesday, February 11, 2003

Here is a look at Tuesday's top business stories:

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Aetna posts profit

HARTFORD, Conn., Feb. 11 (UPI) — Aetna Inc., citing higher premiums and its cost cutting moves, said it posted a fourth-quarter net profit of $98.2 million, or 63 cents a share, compared with a net loss of $187.6 million, or $1.30 a share during the same period a year earlier.

The company, which is the nation's second-largest health insurer just behind UnitedHealth Group Inc., said including a one-time gain it posted a profit of 92 cents a share.

The latest results include approximately $120 million, or 77 cents a share and approximately $23 million, or 15 cents a share of favorable development of prior-period medical cost estimates, Aetna said.

Most analysts on Wall Street had expected Aetna to report a net income of 59 cents a share excluding one-time gains, according to Thomson First Call.

Aetna, which had posted an operating loss in every quarter of 2001, had warned back in December that it would take a $30 million charge to fund cutbacks of almost 700 jobs in the fourth quarter.

Revenues fell to $4.7 billion from $6 billion a year ago.

Aetna said the quarterly decline in revenues reflected lower health membership, partially offset by higher per-member premiums to cover rising medical costs.

John W. Rowe, chairman and chief executive officer, said, "In 2002, Aetna improved its financial performance. This success was built on a seven-point reduction in the medical cost ratio, as well as lower administrative costs.

"This decline in the medical cost ratio was driven by three factors: reduction of membership with historically higher medical cost ratios; price increases that better aligned our prices with competitors' and with our own costs; and more effective contracting, benefit plan designs and medical management programs," Rowe said.

"This substantial improvement in financial performance gives us the momentum needed for the next phase of our turnaround, which will be built on new customer-focused products and service improvements that we expect will lead to profitable growth," Rowe added.

The company said its health care unit, which provides a full range of insured and self-insured health care and dental products and services, reported operating earnings, excluding other items, of $120.7 million for the quarter compared with a fourth quarter 2001 loss of $48.1 million.

Group insurance, which includes group life, disability and long-term care products, reported operating earnings, excluding other items, of $34.7 million for the quarter compared with $36.3 million for the fourth quarter 2001.

Looking ahead Ronald A. Williams, president, said, "Aetna delivered on its promises in 2002, and we believe the company is now firmly re-established as a top-tier competitor in the health care arena. Our broad operational goal for 2003 and beyond is to build on our competitive advantages and grow profitably."

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Fresh Del Monte Produce posts higher results

CORAL GABLES, Fla., Feb. 11 (UPI) — Fruit and vegetable supplier Fresh Del Monte Produce Inc., citing strong sales growth, said its fourth-quarter net income jumped to $35.2 million, or 62 cents a share, from $5.3 million, or 10 cents a share during the same period a year earlier.

The company, which markets bananas, pineapples, melons and other items, said its latest results included a 7 cent a share gain on the sale of the company's interest in its Northern European distributor.

Most analysts on Wall Street had expected the company to post a net income of 34 cents a share excluding one-time gains, according to Thomson First Call.

Sales climbed 15 percent to $487.4 million from $422 million.

Fresh Del Monte Produce said the sales growth was a result of the company's growth across all product lines.

Mohammad Abu-Ghazaleh, chairman and chief executive officer, said, "We're proud that Fresh Del Monte delivered record performance in 2002.

"In addition to achieving outstanding sales, our management team and employees controlled costs effectively, allowing us to maintain one of the strongest balance sheets in our industry. We continue to raise the bar on our performance, and we look forward to executing our growth initiatives in 2003," Abu-Ghazaleh added.

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