were in free fall after the insurer said third-quarter results would be well below forecasts due to rising healthcare costs.
Cigna was down $17.60, or 28%, to $46 on the Instinet premarket session as a number of analysts piled in with downgrades in the wake of the warning.
Cigna said it will earn about $205 million, or $1.47 a share, in the third quarter, excluding more than $1 billion of charges. Last month, Cigna said it expected to earn between $1.90 and $2.05 a share for the quarter, and analysts had been expecting earnings of $1.99 a share.
For the year, the company expects operating income, excluding nonrecurring items, in the range of $915 million to $950 million, or about $6.50 to $6.75 a share.
The company blamed the shortfall on ineffective hedging of medical costs. "The underperformance of our health care operations is clearly unsatisfactory, and we have put a new health care management team in place that is taking aggressive action to address the challenges that we face," the company said in a statement.