Health insurer Cigna reports better-than-expected profit
(Reuters) - Health insurer Cigna Corp CI.N reported a better-than-expected quarterly profit, helped by higher enrollments in its government plans and favorable medical costs.
Cigna, which agreed to be bought by larger rival Anthem Inc ANTM.N in July, also raised the low end of its forecast for full-year adjusted earnings to $8.40 per share from $8.30. The company kept the top end of the guidance unchanged at $8.60.
However, Cigna said it expected revenue growth in 2016 could be offset by reduction in customers in its individual plans, which are sold on exchanges created under the U.S. Affordable Care Act.
Last month, the U.S. government said that in the 37 states where it runs the exchanges, the monthly premium rate of the benchmark health insurance plan would increase 7.5 percent on average.
Cigna manages insurance plans for large companies and sells health plans to individuals on government exchanges. It also manages government Medicare and Medicaid plans.
The company said it had experienced favorable medical costs, physician engagement and low utilization trend on an year-to-date basis.
Revenue at Cigna's unit that sells commercial and government plans rose 8 percent to $6.62 billion in the third quarter. Membership in government plans increased 8.5 percent.
Net income attributable to the company's shareholders rose to $547 million, or $2.10 per share, in the quarter ended Sept. 30, from $534 million, or $2.01 per share, a year earlier.
On an adjusted basis, Cigna earned $2.28 per share, well above the average analyst estimate of $2.20, according to Thomson Reuters I/B/E/S. Continued...