UPDATE 3-Cigna 3rd-qtr profit rises, beats forecasts

* Cigna earnings excluding one-time items top forecasts

* Profit excluding items $1.13/shr versus $1.03 estimate

* Revenue down 8 percent to $4.5 billion

* Shares up 1.2 percent (Updates with outlook, company comment, share price)

By Toni Clarke

BOSTON, Nov 5 (Reuters) - Health insurer Cigna Corp (CI.N) posted third-quarter earnings on Thursday that topped expectations, as cost-cuts offset the impact of declining membership.

Net earnings rose to $329 million, or $1.19 per share, from $171 million, or 62 cents per share, a year earlier.

Excluding one-time items, the company reported earnings of $1.13 per share. Analysts were expecting earnings of $1.03 a share, according to Thomson Reuters I/B/E/S.

Revenue fell 8 percent to $4.5 billion, hurt by intense competition for customers and job losses that knocked members off its rolls.

Cigna had 11.1 million members in the latest quarter, down from 11.9 million members a year before. The company said it expects membership for the full year to decline 5 percent to 5.5 percent.

Still, the company reaffirmed its 2009 outlook as it continues to look for cost savings. It expects revenue of $1.0 billion to $1.1 billion and earnings excluding one-time items of $3.80 a share to $4.00 a share.

Health insurers have posted largely better than expected profits this quarter, though analysts are concerned the healthcare overhaul under debate in Congress will undercut future profitability.

Cigna said it expects membership to remain steady in 2010, but Annmarie Hagan, the company's chief financial officer, told investors on a conference call that it expects the membership losses in 2009 to pressure earnings in 2010.

The company said it expects flat to low-single-digit earnings growth in 2010, with healthcare earnings growth in the low to mid-single digits.

It expects earnings per share in 2010 to be flat compared with 2009. It expects an increase in its weighted average share count of 3 million.

Cigna president David Cordani told investors on the company's call that it does not plan to divest its pharmacy benefits management business. Earlier in the year the company had said it would evaluate options for the business.

The company said it had concluded the unit was performing well and important to its overall strategy.

Cigna said it plans to continue to wring out cost savings. Its cost-cutting efforts so far this year have included a 4 percent reduction in its workforce.

Cigna's shares rose 39 cents, or 1.3 percent, to $30.17 in late morning trading on the New York Stock Exchange. (Reporting by Toni Clarke and Christopher Kaufman; Editing by Gerald E. McCormick and Maureen Bavdek)