Wednesday, February 2, 2011

CIGNA Corporation (NYSE: CI): Q4 Earnings Preview 2010

CIGNA Corporation (NYSE: CI) is scheduled to release its fourth-quarter earnings before the opening bell on Thursday, February 3, 2011. Analysts, on average, expect the company to report earnings of $1.02 per share on revenue of $5.36 billion. In the year ago quarter, the company reported earnings of $1.03 per share on revenue of $4.64 billion.

CIGNA Corporation provides health care and related benefits in the United States and internationally. The Company’s subsidiaries are providers of healthcare and related benefits, the majority of which are offered through the workplace, including healthcare products and services; group disability, life and accident insurance, and workers’ compensation case management and related services.

In the preceding third quarter, the Philadelphia, PA-based company's net income was $307 million, or $1.13, compared to $329 million, or $1.19 per share, in the prior-year quarter. On an adjusted basis, the company earned $1.10 in the latest quarter. Revenue climbed to $5.27 billion from $4.51 billion.  Analysts, on average, expected the company to report earnings of $1.06 per share on revenue of $5.26 billion.

At its last earnings call in October, the company boosted its fiscal 2010 outlook. Cigna said that it now expecta full year 2010 consolidated adjusted income from operations to be in the range of $1.2 billion to $1.25 billion, or $4.35 to $4.50 per share. Previously, the company expected consolidated adjusted income from operations in the range of $1.13 billion to $1.21 billion or $4.10 to $4.40 per share. 

Cigna declined to provide a specific profit forecast for 2011 amid uncertainty from U.S. healthcare reform laws.

Companies within the Health Care Plans sector which include players like CIGNA Corp. and WellPoint Inc. have been working to expand their Medicaid Part D offerings now that baby bombers are reaching retirement age and will soon qualify for subsidized prescription medication under the new healthcare reform. Along with the aging populace, Medicaid is slated to expand by about $40 billion under the new reform law set to go into effect in 2014.

The company provides relatively fewer plans serving individuals and small businesses, which are expected to be most affected by reforms that start next year, instead focusing on administering plans for large employer clients. Cigna's international and disability products also diversify it from exposure to the new regulations.

The company is also now investing in growth opportunities abroad, including products sold directly to individuals that supplement government programs. In its international business for providing supplemental insurance products, Asia will be the main growth area in the near term, complemented by Europe and the Middle East, and the company is eyeing an eventual move into Latin America. "We continue to believe that the global expansion of our business is an extremely attractive opportunity and will continue to be a significant driver of our growth," CEO David Cordani said.

Also, a strong capital position, diverse revenue operations and continual share repurchases bode well for the company.

Full Disclosure: None.
Related Posts with Thumbnails

Wikinvest Wire