) third-quarter 2013 net operating earnings of $1.89 per share
significantly outpaced the Zacks Consensus Estimate of $1.62 per
share. Moreover, the results surged nearly 12% year over year.
Better-than-expected results came on the back of improved
top-line and enrollment growth.
Including one-time items net income came in at $1.95 per share,
up 21% year over year.
Cigna's consolidated revenues came in at $8.0 billion, up 9.3%
year over year. The improvement in revenues was the result of a
7% increase in premiums and fees in Global Health Care, 29% in
Global Supplemental Benefits and 9% in Group Disability and Life.
Top line was ahead of the Zacks Consensus Estimate of $7.8
Total benefits and expenses increased 10.0% year over year to
Cigna's global medical customer base increased by 329,000 members
year-over-year to 14.3 million members.
Quarterly Review by Segment
Premiums and fees from Cigna's Global Health Care segment
increased 7.0% year over year to $5.7 billion, owing to customer
growth, specialty contributions, and renewal rate increases.
Operating earnings increased 1.2% to $424 million on the back of
growth in targeted medical and specialty businesses, favorable
prior-year reserve development, increased medical cost management
and continued operating expense leverage.
Premiums and fees from the Global Supplemental Benefits segment
climbed 29% year over year to $634 million, driven by acquisition
of Great American Supplemental Benefits, Cigna Finansbank joint
venture in Turkey and attractive customer retention and business
growth, primarily in South Korea.
However, increased strategic investment costs led to a decline in
operating earnings to $39.0 million from $40.0 million in the
year ago quarter.
Premiums and fees from the Global Disability and Life segment
climbed 9.4% year over year to $848 million. Operating earnings
increased 39% to $92 million.
Share Repurchase Update
Cigna spent $500 million to buyback 6.4 million shares during the
Cigna ended the quarter with cash and short term investments of
approximately $500 million compared with $700 million at Dec 31,
Shareholders' equity increased to $9.9 billion as of Sep 30, 2013
compared with $9.8 billion as of Dec 31, 2012.
Following the better-than-expected earnings the company pulled up
its 2013 earnings guidance to $ $6.70 to $6.90 per share from its
earlier target of $6.25 to $6.65 per share. Consolidated earnings
from operations is expected to be in the range of $1.90 billion
to $1.96 billion.
Segment wise operating income from Global Health Care is
projected between $1.575 to $1.625 billion, Global Supplemental
Benefits between $185 million to $195 million and Group
Disability and Life in the range of $290 to $305 million.
Global medical customer growth of 1% is estimated.
Cigna retains a Zacks Rank #2 (Buy).
) with Zacks Rank #2 (Buy) beat the third quarter Estimates while
), with a similar rank missed the third quarter Zacks Consensus
) also with same rank is scheduled to report third quarter
earnings on Nov 6, 2013.
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