(Source: The Hartford Courant, Connecticut)
By Kenneth R. Gosselin, The Hartford Courant, Conn.
Nov. 6--CIGNA Corp.'s profits soared 92 percent in the third quarter,
propelled higher by an improving stock market that helped a reinsurance
business the company is winding down.
Net income for the quarter ended Sept. 30 was $329 million, or $1.19 a
share, compared with net income of $171 million, or 62 cents a share, a year
earlier.
The results in the most recent quarter were helped by variable annuity
products in a now-discontinued reinsurance business that suffered heavy losses
in the same quarter in 2008. The improvement in variable annuities was
attributed to gains in the stock market this year.
Adjusted income from operations for the third quarter was $1.13 a share,
compared with 89 cents a share a year earlier. Those results beat the Wall
Street estimate of $1.03, according to a poll of analysts by Thomson Reuters.
Adjusted income excludes certain items such as realized investment gains
and losses.
CIGNA, which bases it health insurance operation in Bloomfield and has
4,000 employees in Connecticut, reaffirmed its operating income estimate of
$3.80 to $4 a share for 2009. Through the third quarter, CIGNA earned $3.54 a
share.
Rate increases partly offset lower premium and fee income resulting from
lower medical membership. Membership declined by 796,000 to 11.1 million on a
year-over-year basis.
CIGNA said it continues to reduce expenses, particularly in its health
care business, which also is helping the bottom line. The company is about
two-thirds of the way through plans for 1,100 layoffs companywide announced at
the beginning of the year.
In Connecticut, a spokesman said, there have been 45 layoffs in this
round of cost-cutting.
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