Dr. Weeks Comment: We long ago ceased to collaborate with health insurance companies.
We prefer to server the patient directly and exclusively.
Now we see the exploitative nature of this industry – Cigna posts 60% surge in 2nd quarter profits. At the expense of patients everywhere.
Health Insurer Cigna’s Second-Quarter Profit Surges By 60%; Tops Analysts’ Estimates
July 30, 2009 9:48 a.m. EST
Mayur Pahilajani – AHN News Writer
Philadelphia, PA (AHN) – Health insurer Cigna Corp. (NYSE: CI) will remain in the spotlight on Thursday in healthcare sector after the firm posted a 60 percent rise in profit in the second quarter that topped estimates.
Net income in the second-quarter increased to $435 million, or $1.58 a share, compared to $272 million, or 96 cents a share, in the year earlier period.
The second quarter of 2009 included a gain from the guaranteed minimum income benefits (GMIB), the annuity business, of $110 million after-tax, or 40 cents per share, primarily related to favorable interest rate movements.
Excluding special one-time items, adjusted income from operations was $1.14 per share in the quarter, from $1.07 per share; compared to the analysts’ forecast of 95 cents per share on average basis.
Revenues were down by 8.2 percent $4.5 billion for the second quarter of 2009, from $4.9 billion. Economists had expected the firm to post revenue of $4.8 billion.
“Our second quarter 2009 results reflect solid earnings contributions from each of our ongoing operations in these challenging economic conditions and demonstrates the benefit of our diversified portfolio of businesses,” Chairman and CEO H. Edward Hanway said in a statement today.
Health care medical claims payable were approximately $750 million at June 30, compared to $713 million at December 31, 2008.
The latest results also included two special items: a benefit of $30 million after-tax, or 11 cents per share, related to the decision to freeze the Cigna pension plan and Cigna supplemental pension plan and an additional after-tax charge of $9 million, or 4 cents per share, which represents incremental actions related to the firm’s previously announced cost reduction plan.
The company now estimates full year 2009 earnings per share, on an adjusted income from operations basis, to be in the range of $3.80 to $4.00 per share. Cigna said in the report that the firm continues to estimate full year 2009 adjusted income from operations for the Health Care segment to be in the range of $700 million to $760 million.
The firm closed down by $1.89 or 6.64 percent to $26.58 on New York Stock Exchange composite trading yesterday.
The stock of the company has slipped by almost 20 percent in the last 52-week period as it has traded between $8.00 and $44.14.