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CIGNA Posts Lower Profits, Raises Outlook Based on Health Membership Growth

Posted on 29 Oct 2010

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Cigna Corp.'s third-quarter profit fell 6.7% as low interest rates weighed on results, though membership increased and medical costs fell at the managed-care company.

Philadelphia-based Cigna also raised its earnings forecast for the year a second time, to $4.35 to $4.50 a share from $4.10 to $4.40.

"This quarter's continued business growth is a result of strong customer retention, expansion of existing relationships and new business sales in our targeted market segments and geographies," said President and Chief Executive David M. Cordani.

Cigna reported a profit of $307 million, or $1.13 a share, down from $329 million, or $1.19 a share, a year earlier. Excluding investments and other effects, earnings fell to $1.10 from $1.13. Revenue increased 17% to $5.27 billion.

Cigna's profit had been improving over recent quarters, benefiting from increasing medical enrollment. Medical membership climbed 339,000 to 11.4 million from a year earlier and increased 78,000 during the third quarter. Many other health insurers have been seeing declining rolls.

The company said Friday that the latest quarter continued to benefit from less-than-expected health-care use.