CIGNA profit beats as nonhealth units shineReprints
NEW YORK (Reuters)—Insurer CIGNA Corp. posted a better-than-expected quarterly profit on Thursday, helped by growth in its disability and life and international segments, although profit at its main health care unit fell slightly.
Its shares rose 8% as the large U.S. health insurer nudged up its full-year profit forecast. CIGNA stood by its expectation for 2009 health care earnings even as it expects a steeper decline in year-end health plan enrollment.
CIGNA is the latest U.S. health insurer to post profits above Wall Street expectations for the second quarter.
The industry is grappling with pressure on employer-based enrollment caused by widespread layoffs in the weak economy, while investors are closely watching efforts by Congress to overhaul the health system.
CIGNA's second-quarter net income rose to $435 million, or $1.58 per share, from $272 million, or 96 cents per share, a year earlier.
Excluding special items, adjusted income of $1.14 a share was well ahead of the 96-cent average forecast of analysts, according to Reuters Estimates.
Revenue fell 7.7% to $4.48 billion, short of the $4.81 billion expected by analysts.
Several analysts pointed to CIGNA's nonhealth care segments for driving the earnings beat.
Profit in the disability and life insurance segment jumped 23% to $90 million, while profit in its international unit rose 31% to $63 million.
Earnings in its health care segment dipped 2% to $177 million, as operating efficiencies helped counter a 7% decline in enrollment, to 11.2 million members.
"(The) beat relative to our projections was in the international and disability and life segments with health care in line with our expectations," Ana Gupte, an analyst with Sanford Bernstein, said in a research note.
CIGNA expects full-year earnings, excluding items, of $3.80 to $4 per share, up from its prior view of $3.70 to $3.90.
It now expects its medical membership to fall some 5% to 5.5%, compared with a previously projected 3% to 4% drop. It also kept its forecast for earnings from its health care segment.