Cigna Lifts FY13 Forecast As Q3 Profit Climbs, Tops Estimates

(RTTNews) - Health insurer Cigna Corp. (CI) reported Thursday a higher profit in its third quarter boosted by strong revenue growth with increased customers. Adjusted earnings surpassed analysts' estimates significantly. Further, the company lifted its fiscal 2013 forecast for adjusted earnings.

President and Chief Executive Officer David Cordani said, "The consistent, effective execution of our strategy coupled with ongoing strategic investments is driving strong financial performance in 2013 and positions us for continued long term growth."

The company's third-quarter shareholders' net income was $553 million or $1.95 per share, higher than prior year's $466 million or $1.61 per share.

The latest quarter's results included income of $32 million or $0.11 per share related to the Guaranteed Minimum Income Benefits business, more than offset by losses of $62 million or $0.21 per share related to costs associated with a realignment and efficiency plan and the HealthSpring acquisition.

For the quarter, adjusted income from operations, which excluded items, was $536 million or $1.89 per share, compared to $489 million or $1.69 per share a year earlier.

On average, 18 analysts polled by Thomson Reuters expected earnings of $1.63 per share for the quarter. Analysts' estimates typically exclude one-time items.

The company said the results reflected strong revenue growth, continued effective medical cost management, and a lower operating expense ratio, partially offset by pressure in Medicare Advantage results.

Quarterly consolidated revenues were $8.07 billion, 10 percent higher than prior year's $7.32 billion. Ten analysts estimated revenues of $7.24 billion for the quarter.

Premiums and fees increased 7 percent in Global Health Care, 29 percent in Global Supplemental Benefits and 9 percent in Group Disability and Life, driven by continued growth in Cigna's targeted customer divisions.

In the healthcare segment, total medical customers as of September 30 was 14.30 million, higher than last year's 13.97 million.

Looking ahead for fiscal 2013, Cigna expects adjusted income from operations to be in the range of $1.9 billion to $1.96 billion or $6.70 to $6.90 per share, an increase from the prior estimate of $1.8 billion to $1.9 billion or $6.25 to $6.65 per share. Analysts project earnings of $6.65 per share in 2013.

While reporting its first and second quarter results in May and August, respectively, Cigna had raised its outlook for adjusted income from operations.

Cigna shares closed Wednesday's trading at $74.64, up $0.34 or 0.46 percent.