CORRECTED-UPDATE 2-Cigna says fourth-quarter profit fell, forecasts 2014 growth
(Removes incorrect reference to premarket stock movement)
Feb 7 (Reuters) - Cigna Corp on Friday reported a lower fourth-quarter profit as medical costs in its private Medicare business came in higher than anticipated, and the U.S. insurer gave a 2014 earnings outlook below analysts' expectations.
The company, which provides health and other insurance, said it expected 2014 earnings of $6.80 to $7.20 per share. Analysts on average had forecast $7.32, according to Thomson Reuters I/B/E/S.
Cigna said it expected its medical customers to grow by 1 percent to 2 percent this year. It ended 2013 with 14.2 million customers, 13.7 million of whom were in its commercial business and 492,000 who were in government programs - Medicare for older people and Medicaid for the poor and disabled.
Most of Cigna's revenue comes from administering benefits for companies, mostly large corporations, that pay the underlying costs of their employees' medical treatment. The company also provides supplemental benefits and group and life disability insurance.
Cigna has a small role on the exchanges that opened on Oct. 1 and on Jan. 1 began providing insurance coverage to individuals under the U.S. Affordable Care Act. It sells these plans in five states.
The company said it had spent 86.4 percent of the Medicare Advantage premiums it received on medical claims during the fourth quarter, compared with a year-earlier medical cost ratio of 82.2 percent.
Net income fell to $361 million, or $1.29 per share, from $406 million, or $1.41 per share, a year earlier.
The latest results included $40 million in restructuring costs, while those in the 2012 period included $68 million for litigation.
Excluding those items, earnings fell to $1.39 per share from $1.57. On that basis, the profit was 10 cents shy of analysts' expectations.
Revenue rose to $8.15 billion, beating Wall Street estimates of $7.35 billion. (Reporting by Caroline Humer; Editing by Lisa Von Ahn)