Cigna's 3Q profit grows 92 percent

Managed care company Cigna Corp., with operations in Bloomfield, said today its third-quarter profit soared 92 percent, as improving equity markets spurred a big turnaround in a business segment that hurt the insurer last year.

Philadelphia-based Cigna earned $329 million, or $1.19 per share, in the three months that ended Sept. 30. That compared to $171 million, or 62 cents per share, in the same quarter of 2008.

Revenue fell 8 percent to $4.5 billion. Cigna also reported an adjusted profit, which excludes one-time items, of $1.13 per share.

Analysts polled by Thomson Reuters forecast earnings of $1.03 per share on $4.59 billion in revenue. Cigna includes results from one of its discontinued businesses in its adjusted profit, but many analysts do not in their projections.

"Overall the (third-quarter) results were good and we saw only modest pressure on health care segment earnings," Wells Fargo analyst Matt Perry said in a research note.

Goldman Sachs analyst Matthew Borsch said in a separate note the stock's valuation remains compelling. He noted that Cigna has much lower exposure to risks from the health care overhaul debate in Congress due to its relatively small enrollment in Medicare Advantage and individual or small group insurance products.

An improving equity market helped Cigna generate $16 million in income during the third quarter from variable annuity products in a segment the insurer maintains but no longer sells or markets. Those products lost $133 million in the same quarter last year.

The company operates health care, group disability and life and international business segments. Cigna's premiums and fees in both its group disability and life and international business segments rose slightly.

Premiums and fees in health care, its biggest segment, fell 6 percent to $2.8 billion due to a medical enrollment decline that was partially offset by rate increases, the company said in a statement.

Cigna's medical enrollment fell 7 percent to 11.1 million from the third quarter of 2008.

Several Cigna competitors -- including Indianapolis-based WellPoint Inc. and Minnetonka, Minn.-based UnitedHealth Group Inc. -- also have reported sliding third-quarter enrollments driven mainly by employer job cuts. That reduces the number of people covered by employer-sponsored health insurance.

Cigna, which started the year with medical enrollment of about 11.7 million, expects a decrease of 5 to 5.5 percent in 2009.

Cigna maintained its 2009 adjusted profit outlook of $1.04 billion to $1.1 billion, or $3.80 to $4 per share. Analyst expect $3.85 per share.

The insurer had about 11.1 million members at the end of the third quarter. (AP)