) fourth-quarter 2013 net operating earnings of $1.39 per share
lagged the Zacks Consensus Estimate of $1.48 per share. Earnings
were also down 11.5% year over year.
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The earnings miss was on account of higher benefits and expenses
which outpaced revenue growth.
Including one-time items, net income came in at $1.29 per share,
down 9% year over year.
Cigna's consolidated revenues came in at $8.2 billion, up 7.0%
year over year and considerably higher than the Zacks Consensus
Estimate of $7.9 billion. The improvement in revenues resulted
from a 9% increase in premiums and fees in Global Health Care,
27% in Global Supplemental Benefits and 10% in Group Disability
Total benefits and expenses at Cigna increased 9.0% year over
year to $7.6 billion.
For full-year 2013, operating income came in at $6.79 per share
lagging the Zacks Consensus Estimate of $6.87 per share. The
figure was, however, up 13.4% year over year.
Full-year revenues of $32.4 billion compared favorably with the
Zacks Consensus Estimate of $31.4 billion and also increased
11.2% year over year.
Quarterly Review by Segment
Premiums and fees from Cigna's
Global Health Care
segment increased 6.0% year over year to $5.7 billion, owing to
customer growth, specialty contributions and renewal rate
Operating earnings decreased 20.0% to $318 million led by high
medical costs in Medicare Advantage business and claim
variability in the company's Guaranteed Cost business.
Premiums and fees from the
Global Supplemental Benefits
segment climbed 12% year over year to $662 million, driven by
acquisition of Great American Supplemental Benefits, the
Cigna-Finansbank joint venture in Turkey and attractive customer
retention and business growth, primarily in South Korea.
Operating income increased 5.3% year over year to $40.0 million
led by strong customer retention and business growth, partly
offset by increased strategic investment costs.
Premiums and fees from the
Global Disability and Life
segment climbed 8.6% year over year to $873 million, due to
growth in both disability and life businesses. Operating earnings
increased 17.9% to $66 million, due to improved life claims
experience and lower operating expenses, partially offset by
unfavorable disability claims experience
Share Repurchase Update
In 2013, Cigna spent $1.0 billion on share buyback.
Cigna ended the quarter with cash and short-term investments of
approximately $760 million compared with $700 million at Dec 31,
Shareholders' equity increased to $10.6 billion as of Dec 31,
2013 compared with $9.8 billion as of Dec 31, 2012.
For 2014, Cigna expects earnings in the range of $6.80 to $7.20
per share. Consolidated earnings from operations is expected to
be in the range of $1.90 billion to $2.0 billion.
Segment-wise operating income from Global Health Care is
projected between $1.575 and $1.635 billion, Global Supplemental
Benefits between $195 million and $215 million and Group
Disability and Life in the range of $305 to $325 million.
Global medical customer growth is estimated at 1% to 2%.
Cigna has a Zacks Rank #2 (Buy).
Other health insurers who have already reported their quarterly
earnings results include
UnitedHealth Group Inc.
). Both the companies beat the respective Zacks Consensus
Estimate by a penny.
) which reported earnings yesterday, on the other hand, missed
the estimate by a penny.