Cigna Wipes Out Estimate

Second-half guidance is consistent with estimates.
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Cigna's

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second-quarter earnings shot up 43% from a year ago, swollen by tax-related gains. On an operating basis, earnings rose about 11% thanks to a stronger performance in the insurer's disability and life segments.

Bottom-line earnings were $720 million, or $5.48 a share, in the latest quarter, compared with $504 million, or $3.59 a share, a year ago. Adjusted income from operations were $260 million, or $1.98 a share, in the latest quarter, compared with $235 million, or $1.68 a share, a year ago.

The latest quarter's adjusted number beat the Thomson First Call estimate of $1.55 a share. Cigna's second-quarter revenue fell about 11% from a year ago to $4.11 billion, about $60 million ahead of forecasts.

In Cigna's biggest division, healthcare, adjusted earnings fell 1% from a year ago to $173 million, while premiums slipped 5% to $2.54 billion. Adjusted earnings in disability and life insurance rose 23% from a year ago to $59 million, while adjusted earnings rose 25% in the international segments to $25 million.

For the third quarter, Cigna expects to earn $1.40 to $1.60 a share; the consensus estimate is $1.57 a share. For the year, the company expects to earn $7 to $7.40 a share; the consensus estimate is $6.92 a share. Given the magnitude of the second-quarter beat, the high end of the full-year guidance suggests an in-line fourth quarter.

The shares were recently up $6, or 5.5%, to $114.40.