Cigna Corp.’s second-quarter earnings slipped 3 percent, as hits from discontinued businesses countered acquisition-fueled revenue gains. The Bloomfield health insurer still raised its forecast for 2012, The Associated Press reports.
Cigna aid Thursday it added $10 million after taxes to reserves for its variable annuity death benefits business in the second quarter. That amounted to a hit of 3 cents per share on Cigna’s earnings.
Cigna discontinued that business and its guaranteed minimum income benefits years ago and seeks no new business for them. But those businesses can still affect the company’s performance in a tough market because Cigna’s liabilities toward them increase. The insurer also recorded a loss of 17 cents per share in the quarter from the guaranteed minimum income benefits business.
Overall, the insurer earned $380 million, or $1.31 per share, in the three months that ended June 30. That compares with net income of $391 million, or $1.43 per share, in last year’s second quarter.
Cigna said last year that it had earned $408 million, or $1.50 per share, in the 2011 second quarter. But the insurer has since adjusted the figure to account for some new accounting rules it adopted in 2012.
Adjusted earnings, which exclude some one-time items, were $1.49 per share in this year’s second quarter, and revenue climbed 35 percent to $7.46 billion.
That performance topped Wall Street expectations. Analysts expected, on average, earnings of $1.43 per share on $7.24 billion in revenue, according to FactSet.
Cigna now expects 2012 adjusted earnings to range between $5.25 and $5.60 per share, up from its previous forecast of $5.20 to $5.55 per share. Analysts expect, on average, earnings of $5.51 per share.
