Cigna Guidance on Light Side

The first quarter beats targets, though.
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Cigna (CI) - Get Report posted a drop in first-quarter profit and offered full-year guidance below Wall Street's current estimates.

For the quarter ended March 31, the Philadelphia-based health insurer made $352 million, or $2.87 a share, down from the year-ago $436 million, or $3.28 a share. Revenue fell to $4.11 billion from $4.35 billion a year earlier.

On an adjusted operating basis, excluding investment gains and losses, latest-quarter earnings slipped to $2.11 a share from $2.24 a year ago but beat the $1.88 Thomson estimate.

"We generated solid earnings in each of our businesses in the first quarter of 2006," said CEO H. Edward Hanway. "In health care, our membership was stable and remains on track for growth over the course of the year. Our group disability and life business and our international operations posted strong results reflecting the strength of their competitive positions. Looking ahead, we'll continue to invest in and capitalize on our unique capabilities as a consumer-focused health advocate to improve the health of our members and maintain our leadership in the consumer-driven benefits marketplace."

The company bought back 3.4 million shares for $419 million during the first quarter and 947,000 shares for $121 million in April. As of May 3, the company has $720 million of stock repurchase authority available.

Cigna forecast earnings of $1.75 to $1.90 a share for the second quarter and $7.50 to $8 for the year. Analysts were looking for $1.99 for the quarter and $8.06 for the year.