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ability to manage its medical expenses will result in higher-than-expected earnings this year and next.

Before investment and other items, the Philadelphia health insurer expects to earn $950 million to $975 million in 2004 and $750 million to $825 million in 2005. Its old estimate was $925 million to $950 million this year and $745 million to $810 million next year.

"Our increased earnings outlook demonstrates our strength in medical management," Cigna said. "Cigna's emphasis on medical management and clinical quality continues to deliver cost-effective solutions to employers and quality health care outcomes to our members."

The stock closed Tuesday at $70.02, about 3% below its 52-week high. The stock is up about 23% this year.