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Feb 7 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'
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
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
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
Excluding those items, earnings fell to $1.39 per share from
$1.57. On that basis, the profit was 10 cents shy of analysts'
Revenue rose to $8.15 billion, beating Wall Street estimates
of $7.35 billion.
(Reporting by Caroline Humer; Editing by Lisa Von Ahn)