Cigna posts higher profit, raises forecast

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NEW YORK (Global Markets) - Cigna Corp (CI.N) posted a 52 percent jump in quarterly profit on Thursday, helped by membership growth in its healthcare plans, and the insurer raised its full-year forecast.

The first-quarter results from Cigna, which also gave a rosier full-year membership outlook, closes a strong reporting season across the board for large U.S. health insurers, which raised their profit outlooks for 2011.

The insurers have benefited from Americans using medical services at lower-than-expected rates as they grapple with the shaky economy.

Cigna's first-quarter net income rose to $429 million, or $1.57 per share, from $283 million, or $1.02 per share, a year earlier.

Excluding special items, earnings easily topped analysts' expectations, but the extent of the beat was not immediately clear, according to Thomson Global Markets I/B/E/S.

Cigna shares rose 2.4 percent.

First-quarter "results appear to be of high quality with multiple drivers of upside strength," Goldman Sachs analyst Matthew Borsch said in a research note, citing outperformance in Cigna's international, and disability and life insurance segments, as well as for healthcare.

Revenue rose 4 percent to $5.41 billion. Analysts looked for $5.45 billion.

Cigna is more heavily weighted than rivals in fee-based health plans for larger employers, rather than plans that assume insurance risk. Those fee-based plans tend to be less profitable, but also were not as targeted under last year's healthcare overhaul, making Cigna seemingly more immune to the regulatory changes.

Earnings in the healthcare segment jumped 47 percent to $246 million. Membership rose in Cigna's behavioral and dental plans, as well as in its main medical plans. Its healthcare medical claims expenses fell 6 percent.

"Mirroring the trend reported by others in the industry, Cigna's bottom line outperformance ... was primarily a result of lower than expected medical utilization," Susquehanna Financial Group analyst Chris Rigg said in a research note.

Profit in Cigna's smaller disability and life, and international segments rose 10 percent and 7 percent, respectively.

Cigna projected 2011 earnings, excluding items, at $4.65 to $5.00 per share, up from its prior range of $4.30 to $4.70. Analysts have been looking for $4.73.

"We expect there is some conservatism in operating earnings guidance as well and see opportunities for the company to further 'beat and raise' numbers as the year progresses," Sanford Bernstein analyst Ana Gupte said in a research note.

The company projects membership to rise between 1 percent to 3 percent this year, after previously saying it could be flat in 2011.

Cigna shares were up $1.09 at $47.01 in morning trading on the New York Stock Exchange. Through Wednesday, Cigna shares had climbed 25 percent this year, although that was less than a 35 percent rise for S&P Managed Healthcare index .GSPHMO of large insurers.

(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn, Dave Zimmerman and Derek Caney)