REFILE-UPDATE 1-Cigna profit beats as HealthSpring deal boosts premiums

Thu Aug 2, 2012 7:23am EDT

* Q2 adj EPS $1.49 vs est $1.42

* Q2 rev $7.46 bln vs est $7.24 bln

* Raises 2012 profit view for the second time this yr

Aug 2 (Reuters) - Insurer Cigna Corp reported a better-than-expected quarterly profit and raised its 2012 earnings forecast for the second time this year, as its takeover of Medicare specialist HealthSpring helped boost premiums and fees.

Cigna on Thursday reported second-quarter net income of $380 million, or $1.31 per share, compared with $391 million, or $1.43 per share, in the year-earlier period.

Excluding special items, Cigna earned $1.49 per share, topping analysts' estimates of $1.42 per share, according to Thomson Reuters I/B/E/S.

Total revenue for the quarter rose 35 percent to $7.46 billion, above Wall Street expectations of $7.24 billion. Revenue growth was largely spurred by the HealthSpring acquisition, which led to a 52 percent rise in premiums and fees in the healthcare segment.

The company bought HealthSpring for $3.8 billion earlier this year.

The deal gave Cigna a foothold in the business of selling privately administered Medicare plans for senior citizens, allowing it to attract the wave of baby boomers becoming eligible for the federal health program.

Cigna raised its 2012 adjusted earnings forecast to $5.25 to $5.60 per share. In May, the company had raised its 2012 view to between $5.20 and $5.55 per share, citing strong profit from healthcare, its largest segment.

Profit in the company's healthcare division rose 19 percent to $332 million. Earnings in its disability and life segment rose 1 percent to $89 million.

Earnings rose 14 percent in its international segment, which sells supplemental insurance to individuals overseas, including to employees working abroad.

The company's shares closed nearly flat at $40.24 on Wednesday on the New York Stock Exchange.

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