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BLOOMFIELD, Conn. (AP) — Cigna easily topped Wall Street expectations for the third quarter and the insurer raised its outlook for the full year.
Profits more than doubled, partially due to the acquisition of HealthSpring Inc., but also because earnings last year were weighed down by discontinued business.
Cigna earned $466 million, or $1.61 per share, in the three months that ended Sept. 30. That compares with earnings of $183 million, or 67 cents per share, in the previous quarter.
Adjusted earnings, which exclude some one-time items, were $1.69 per share.
Revenue climbed 31 percent to $7.36 billion.
Analysts surveyed by FactSet expected, on average, earnings of $1.37 per share on $7.34 billion in revenue.
The insurer now expects 2012 adjusted earnings to range between $5.70 and $5.90 per share, topping Wall Street expectations of $5.56 per share. The company had previously said it would earn between $5.25 and $5.60.
The company took a 50 cent per-share hit last year from its guaranteed minimum income benefits, which it discontinued years ago. Cigna no longer offers new coverage in that area, nor does it offer variable annuity death benefits, but results from those operations can hurt the company in a tough market because it is still on the hook for rising liabilities.
The insurer also recorded a smaller after-tax loss of 2 cents per share this year from the variable annuities death benefits business, compared to a loss of 16 cents per share in 2011.
Cigna Corp., based in Bloomfield, Conn., is the fourth-largest commercial health insurer based on enrollment, trailing WellPoint Inc., UnitedHealth Group Inc. and Aetna Inc. Cigna has a broader product portfolio than some of its competitors. It operates health care, group disability and life segments in the U.S. The insurer also has an international segment that sells individual insurance in several countries and operates an expatriate business that covers people living outside their home countries.
Premiums and fees from health care, the insurer's largest segment, climbed 51 percent in the third quarter to $4.92 billion. Rate increases and business growth contributed to the increase, as did Cigna's $3.8-billion acquisition of HealthSpring, a deal that closed in January.
Cigna's international business also recorded a 22 percent gain in premiums and fees to $930 million.