Cigna Q2 Adj. Profit Tops View, But Revenues Miss; Reaffirms 2015 Outlook

(RTTNews) - Health insurer Cigna Corp. (CI), which is being acquired by larger peer Anthem, Inc. (ANTM), reported Thursday a profit for the second quarter that grew three percent from last year, driven by contributions across its diversified portfolio of businesses amid improved premiums and fees. Global medical customers and policies also improved.

Adjusted earnings per share topped analysts' expectations, while quarterly revenues missed their estimates by a whisker. The company also reaffirmed adjusted earnings and revenue growth guidance for the full-year 2015.

"Cigna's strong second quarter results once again reflect the consistent effective execution of our global strategy," President and CEO David Cordani said.

The Philadelphia, Pennsylvania-based company reported shareholders' net income of $588 million or $2.26 per share for the second quarter, higher than $573 million, or $2.12 per share in the prior-year quarter.

Results for the latest quarter include a charge of $0.25 per share related to costs associated with the previously announced early redemption of long term debt.

Excluding special items, adjusted income from operations for the quarter was $664 million or $2.55 per share, compared to $559 million, or $2.07 per share in the year-ago quarter.

On average, 14 analysts polled by Thomson Reuters expected the company to report earnings of $2.31 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 9 percent to $9.49 billion from $8.73 billion in the same quarter last year, but missed nine Wall Street analysts' consensus revenue estimate of $9.53 billion by a whisker.

The revenue growth was primarily driven by continued growth in Cigna's targeted customer segments.

Premiums and fees increased to $8.49 billion from $7.76 billion a year ago, and mail order pharmacy revenues rose to $625 million from $547 million a year ago.

Net investment income totaled $297 million, edging up from $294 million, while other revenues declined to $60 million from $69 million in the year-ago quarter. Net realized investment plunged to $21 million from $65 million last year.

Segment wise, global health-care premiums and fees rose 10 percent to $6.73 billion, and global supplemental benefits premiums and fees totaled $749 million, up 4 percent from last year. Group disability and life premiums and fees increased 10 percent to $978 million from a year ago.

As of the end of the second quarter, global medical customers grew to 14.77 million from 14.25 million, and policies increased to 12.76 million from 12.27 million at the end of the year-ago quarter.

Looking ahead to fiscal 2015, Cigna reaffirmed its recently raised guidance for consolidated adjusted income from operations in a range of $8.30 to $8.60 per share, while continuing to project revenue growth of 8 to 10 percent.

The Street is currently looking for full-year 2015 earnings of $8.56 per share on annual revenue growth of 10.1 percent to $38.29 billion.

"As we look to the future, and our recent announcement that we will combine with Anthem to build the industry's premier health service company, we remain focused on delivering affordable, personalized solutions that create sustained long-term value for the benefit of our customers and clients around the world," Cordani added.

In Thursday's regular trading session, CI is currently trading at $145.01, down $0.40 or 0.28% on a volume of 0.43 million shares. In the past 52-week period, the shares have been trading in a broad range of $85.75 to $170.68.