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Cigna Talks Up 2003

One of 2003's major debacles takes a step toward righting its ship.
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(CI) - Get Cigna Corporation Report

might be the only publicly traded health insurer trying to put 2002 behind it, and took a step in that direction Friday.

While reporting sharply lower fourth-quarter results that were weighed down by restructuring charges and lawsuit reserves, the company managed to top analysts' forecasts on an adjusted basis, and predicted essentially solid results for 2003.

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The Philadelphia HMO earned $47 million, or 33 cents a share, in the fourth quarter, compared with $191 million, or $1.32 a share, a year ago. Backing out the charges and other items, adjusted operating income from continuing operations was $178 million, or $1.27 a share -- 7 cents above the consensus estimate compiled by First Call. Revenue fell to $4.75 billion from $4.81 billion.

Cigna also predicted it'll earn $6.25 to $6.50 a share on an adjusted basis in 2003, well above existing analyst estimates of $5.83 a share and not hugely worse than the $6.65 it put up for all of 2002.

"We are taking the necessary actions to improve the financial results of our health care business. Meanwhile, our other employee benefits businesses continue to produce solid financial results," the company said in a statement.

The forecast should be some relief to investors who saw the stock go from a close of $63.60 on Oct. 24 to $37 the next day after Cigna said it had underestimated medical expenses and slashed its earnings outlooks for several quarters. The stock closed at $39.22 Thursday, down about 4%.