Cigna Corp. (CI) Thursday reported an 85 percent decline in profit for the first quarter, as the health insurer incurred a hefty charge related to the previously announced exit of the Run-off Reinsurance business. However, adjusted earnings topped Wall Street estimates and the company raised its full year earnings forecast.
Shareholders' net income plunged to $57 million or $0.20 per share from $371 million or $1.28 per share last year. The latest results included special items which generated losses of $1.93 per share and realized investment gains of $0.32 per share.
Adjusted income from operations totaled $1.72 per share, while it was $1.24 per share last year. On average, 18 analysts polled by Thomson Reuters expected earnings per share of $1.43 for the quarter. Analysts' estimates typically exclude one-time items.
Total revenues climbed 21 percent to $8.2 billion from $6.75 billion with a 20 percent increase in Premiums and fees and a 10 percent growth in Mail order pharmacy revenues. Analysts estimated revenues of $7.31 billion for the quarter.
Global Health Care revenue climbed 19 percent to $6.37 billion. Premiums and fees increased 20 percent due to an additional month of HealthSpring premium reflecting the timing of the acquisition on January 31, 2012. The results also benefited from business growth, rate increases and increased specialty penetration.
Revenue from Global Supplemental Benefits was 35 percent higher at $637 million. Premiums and fees climbed 36 percent, reflecting recent acquisitions and attractive customer retention and business growth, primarily in South Korea.
Group Disability and Life reported an 11 percent growth in quarterly revenues at $934 million and benefited from premium and fee growth of 12 percent.
Cigna's Global Medical Customers climbed to 14.32 million from 13.87 million.
For 2013, the company increased its outlook for earnings, on an adjusted income from operations basis, to $1.735 billion - $1.865 billion or $6.00 - $6.45 per share, from its earlier target of $1.7 billion - $1.83 billion or $5.85 - $6.30 per share. Analysts project annual earnings of $6.35 per share.
Among peers, Humana Inc. (HUM) Wednesday reported a significant increase in first-quarter profit and lifted its full-year earnings forecast, but said earnings growth in 2014 is uncertain at this time.
CI closed at $65.38 on Wednesday. The stock is up 3.4 percent in pre-market activity.
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