Shares of insurance company Cigna Healthcare (NYSE:CI) jumped nearly 19% today on the strength of its third-quarter earnings. After several quarters of runaway health-care costs relative to the premiums it charges, Cigna appears to be gaining control of the situation. And while, the health-care segment still saw weakness this period, results were better than they have been.
Cigna posted a profit of $195 million, or $1.39 a share, compared to a net loss in the prior year's Q3 of $877 million, or $6.27 a share. Excluding realized investment results and special charges, Cigna earned $204 million from continuing operations vs. $202 million last year.
The company's health-care division, which includes its health management organization and indemnity insurance operations, generated a drop in profits of 6% from the same quarter last year. Sequentially, though, the unit's earnings grew 66% from $73 million to $121 million.
Cigna forecasted stronger-than-anticipated earnings growth for the rest of the current fiscal year and for 2004. It now expects to earn $5.35-$5.55 a share, up from an earlier projection of $5-$5.25. The company's planning for 2004 earnings per share of $5.55-$5.95 a share, better than analysts' $5.26 estimate.
