At its recently held investors' meeting, health insurer
CIGNA Corp.
(
CI
), reaffirmed its 2012 adjusted earnings guidance range of
$1.52-$1.63 billion. This would translate into a year-over-year
growth rate of 12%-20%. On a per-share basis, earnings are expected
in the $5.20-$5.50 range, reflecting growth of 5%-12% year over
year.
Cigna also provided a segment wise breakup of core earnings with
HealthCare, International, Group Disability & Life expected to
contribute $1.19-$1.26 billion, $2.65-$2.85 billion and $2.60-$2.80
billion, respectively. However, its Run-off segment is expected to
post an adjusted loss of $1.95 billion.
Regarding growth opportunities for 2013 and beyond, Cigna
expects mid single-digit revenue growth in its U.S Commercial line
of business, owing to increasing demand for improved health care
solutions & lower costs. The company expects to achieve market
expansion via its consultative selling, differentiated Health and
productivity solutions and its unique funding alternatives.
Cigna expects high single- to low double-digit growth in revenue
in the Medicare/Senior Healthcare business. This growth is expected
following improving demographics, geographic expansion,
differentiated physician engagement and leading service and
quality.
Its International business is expected to be its chief driver of
future growth and Cigna projects mid-teens revenue growth from the
segment. This growth will be prompted by growing middle class in
the emerging markets, increasing demand for globally mobile
solutions, and its global delivery infrastructure.
Cigna also sees meaningful future opportunities in its U.S
Individual and Retail lines of business. The recently concluded
HealthSpring transaction is expected to drive meaningful future
growth.
Cigna is working aggressively on its three-pronged strategy of
Go Deep, Go Global and Go Individual. With a proven leadership team
and adequate financial strength, the company is set to present a
differentiated earnings performance and provide substantial
shareholder return in the coming years.
Cigna also issued a strong capital outlook with increased
capital of $550 million available for deployment, of which $295
million is committed to the pending acquisition of the Great
American Supplemental Benefits Group.
Despite an acute uncertainty in the health insurance industry,
related to the Health Care Reform Act, the company managed to post
a three-year compound annual growth rate (CAGR) of +5% for revenue
and +9% for earnings.
The company's focus on health improvement, a strong consultative
sales force, strong national franchise for commercial business and
Medicare, consistent and effective services and clinical delivery
has helped it to win customers.
Peer
Aetna Inc.
(
AET
) also affirmed its 2012 earnings per share (EPS) guidance of $5.00
at the company's recently held investors' meeting.
AETNA INC-NEW (AET): Free Stock Analysis Report
CIGNA CORP (CI): Free Stock Analysis Report
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