NEW YORK (TheStreet) -- Cigna (CI) was falling 9.34% to $77.39 just before 3:30 p.m. on Friday after the health insurance company reported fourth-quarter earnings per share and full-year guidance less than analysts' expectations.
Cigna posted EPS, excluding one-time charges, of $1.39, down from $1.57 in the same period one year earlier. Analysts had expected EPS of $1.48, according to FactSet. For the upcoming fiscal year, the company expects EPS between $6.80 and $7.20, while analysts expect $7.29 a share.
Cigna reported an 11% year-over-year drop in net income to $361 million, or $1.29 a share, from $406 million, or $1.41 a share. Revenue increased year over year to $8.15 billion from $7.62 billion.
TheStreet Ratings team rates CIGNA CORP as a "buy" with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate CIGNA CORP (CI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 49.06% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, CI should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
- CIGNA CORP has improved earnings per share by 21.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, CIGNA CORP increased its bottom line by earning $5.61 versus $4.59 in the prior year. This year, the market expects an improvement in earnings ($6.88 versus $5.61).
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Health Care Providers & Services industry average. The net income increased by 18.7% when compared to the same quarter one year prior, going from $466.00 million to $553.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 11.4%. Since the same quarter one year prior, revenues rose by 10.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels.
- You can view the full analysis from the report here: CI Ratings Report