|
Cigna 3Q tops forecast
|
 |
November 2, 2000: 12:43 p.m. ET
No. 3 U.S. health insurer credits gains to premium growth, improved margins
|
NEW YORK (CNNfn) - Cigna Corp., the No. 3 U.S. health insurer, reported a better-than-expected profit for the third quarter Thursday, citing improved profit margins and premium growth.
Cigna earned $281 million from continuing operations, down from $286 million in the year-ago quarter, as profit was pulled down by higher corporate costs. On a per-share basis, however, earnings rose about 20 percent -- benefiting from an ongoing share repurchase program, which reduced the number of shares outstanding during the quarter and thus boosted per-share results.
Earnings totaled $1.76 per share excluding one-time items, up from $1.47 per share in the year-earlier quarter. Analysts surveyed by earnings tracker First Call Corp. had anticipated a profit of $1.68 per share.
 Net income including one-time items totaled $278 million, or $1.74 per share, down from $1.1 billion, or $5.44 per share, in the 1999 period. The year-earlier results included a special after-tax gain of $1.2 billion from the sale of its domestic and international property and casualty business to ACE Limited.
Revenue rose 7 percent to $5 billion. Besides its managed care operations, Cigna also offers life insurance, annuities and pension products.
"We continue to achieve good earnings momentum and strong margins in our health care business for both our core products and specialty offers," Cigna Chief Executive Officer H. Edward Hanway said in a statement.
During the quarter, HMO premiums and fees rose 7 percent, while Cigna also posted a 7 percent growth in patients enrolled in its HMO and indemnity programs, to 14.3 million people.
The company lowered its commercial HMO medical risk loss ratio -- the percentage of premium revenue spent on medical services -- to 83.8 percent, from 85.5 percent. But the HMO administrative expense ratio rose to 10.6 percent, from 9.9 percent.
The company said it repurchased 4.4 million shares of its common stock for $432 million during the third quarter.
Cigna (CI: Research, Estimates) is the country's third-biggest managed care company, behind industry leader Aetna Inc. (AET: Research, Estimates) and UnitedHealth Group Inc. (UNH: Research, Estimates).
In a conference call with analysts, the company said it expects consolidated net profit to total about $1.1 billion, or $6.70 a share, for the full year. The per-share forecast is slightly below analysts' consensus estimate of $6.71.
The company also said during the call it expects consolidated profit in 2001 to be in the range of $1.16 billion to $1.19 billion, or about $7.40 to $7.60 share.
At midday, Cigna shares slipped $2.35, or about 2 percent, to $116.75. The stock is trading near a 52-week high of $123, up from a 52-week low of $60.75. 
-- from staff and wire reports
|
|
|
|
|
|
Cigna
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
