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UPDATE 3-Cigna ups profit outlook again as HealthSpring pays off

* Shares rise as earnings beat estimates

* Acquired HealthSpring earlier this year

* $50 mln in charges for severance

Nov 1 (Reuters) - Health insurer Cigna Corp raised its earnings outlook for the year as its recent purchase of specialized Medicare provider HealthSpring again helped the bottom line more than expected, enabling it to beat analyst forecasts for quarterly profits.

The nation's fifth-largest insurer more than doubled its quarterly profit as premiums and fees at its healthcare segment jumped 51 percent, driven by contributions from HealthSpring, which Cigna acquired for $3.8 billion earlier this year as well as growth in its commercial business.

Cigna shares rose 3.2 percent to new 52-week trading highs.

Health insurers are facing a healthcare overhaul as the government tries to cut spending by reining in reimbursements for services, and have been on an aggressive acquisition spree to gain scale and market share.

Recent big deals include UnitedHealth Group Inc's $4.9 billion purchase of a majority stake in Brazilian health insurer Amil Participacoes SA and Aetna Inc's takeover of Coventry Health Care Inc for $5.6 billion.

``I thought the results looked strong across multiple categories,'' Sarah James, an analyst at Wedbush Securities said, noting growth in international operations and strong cost controls there and across Cigna's government and employer-based business as well as its pharmacy business.

The company's 2013 enrollment outlook for its employer-based health insurance business seemed more positive than that of UnitedHealth and Aetna. High unemployment rates are expected to create a tougher climate next year. It added 1.25 million members in the first nine months of 2012 for a total of 12.7 million members.

``I think part of that is that they are going after a different kind of account,'' she said, explaining they target their customers more closely to try to retain more customers.

HEADWINDS IN 2013

Still, Chief Executive Office David Cordani said during a conference call with analysts and investors that he expects ``continuing economic headwinds'' in 2013 and that to manage costs, the company is taking a $50 million charge for severance this quarter.

In a follow-up interview, he said that one uncertainty for next year is the so-called fiscal cliff - about $600 billion in government spending cuts that are due to take place unless Congress takes action.

``From a Cigna standpoint, I don't worry about the fiscal cliff as being a singular event that affects Cigna. I worry about it as an event that effects the overall economy and provides an overall headwind on employers and individuals,'' Cordani said.

The company's strong results follow the market-topping profits posted by rivals UnitedHealth and Aetna last month.

Cigna's HealthSpring government business for older adults has been better able to weather pricing pressure because it is set up differently. It places nurses and other healthcare managers inside doctors' offices - typically big practices with hundreds of physicians - and focuses on preventative care. That helps manage costs, the company said.

Third-quarter net income rose to $466 million, or $1.61 per share, in the third quarter, from $183 million, or 67 cents per share, a year earlier.

Excluding items, the company earned $1.69 per share, handily beating analysts' average estimate of $1.36, according to Thomson Reuters I/B/E/S.

Those third-quarter 2012 items include the charge related to severance as well as a charge related to the acquisition of HealthSpring.

The insurer now expects full-year adjusted earnings of $5.70 to $5.90 per share, up from its prior forecast of $5.25 to $5.60 per share in August.

For 2013, it expects to grow earnings and revenue, Cordani said during the call, but did not provide details.

Cigna's total third-quarter revenue rose 31 percent to $7.4 billion. Revenue at its international segment rose 22 percent, and disability and life segment revenue increased 9 percent.

Shares of Cigna, which has a market capitalization of $14.71 billion, rose to $52.62 in midday trading Thursday after having closed at $51 on Wednesday on the New York Stock Exchange.

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