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Health insurer Cigna Corp. (NYSE: CI) reported a plunge of 80% in first-quarter profit this morning. The results were dragged down by deep charges related to its reinsurance business and litigation. The company missed analysts' earnings targets, and also issued a warning for its full-year earnings, sending its shares down in premarket. For the quarter, Cigna said that its profit dropped to $58 million, or 21 cents per share, compared with $289 million, or 98 cents, reported in the same period a year ago. Excluding one-time items, the insurer's earnings numbers would have come at 94 cents per share, one cent below the average estimate of analysts, according to Thomson Financial .
Looking at revenue, Cigna posted a rise of 4.5% in the quarter on a year-over-year basis. Analysts had been expecting to see revenue of $4.55 billion, while the actual number was slightly higher, at $4.57 billion. The company said that the number of clients who joined its health plans jumped 5.5% to 10.4 million.
Looking ahead, the health insurer said it expects 2008 adjusted earnings of
As a result of its lower-than-expected earnings numbers and disappointing outlook, I'd expect some selling in the stock today. Wall Street has definitely been weary of an economic slowdown, so any forward looking statements that do not exceed Wall Street estimates are going to result in some selling.
Eliza Popescu is a financial writer for the online investment advisory service Investor's Observer.
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