CORRECTED-UPDATE 2-Cigna profit rises and beats analyst expectations
(Corrects number of Medicare and Medicaid customers in 9th paragraph to 488,000 from 488 million)
Oct 31 (Reuters) - Insurer Cigna Corp on Thursday reported a third-quarter profit that beat analysts' expectations as revenue increased and it managed medical costs in its commercial business.
Net income rose to $553 million, or $1.95 per share, from $466 million, or $1.61 per share, a year earlier.
Excluding investment gains, the company reported a profit of $1.89 per share. On that basis, analysts on average had expected $1.63, according to Thomson Reuters I/B/E/S.
Cigna, which provides U.S. and overseas health insurance as well as disability and life insurance, said it expected full-year earnings of $6.70 to $6.90 per share. Analysts were expecting $6.65, according to Thomson Reuters I/B/E/S.
Revenue rose to $8.1 billion from $7.3 billion.
The company said the results reflected continued medical cost management and a lower operating expense ratio that were partly offset by some pressure on its private Medicare plans for older people.
Cigna's report comes after larger competitor Aetna Inc missed analysts' earnings expectations earlier this week, in part because of funding cuts in private Medicare. UnitedHealth Group Inc's quarter met but did not beat expectations for similar reasons.
Cigna has a private Medicare business, but it is comparatively small.
Cigna said that as of Sept. 30, it had 13.8 million commercial customers and 488,000 customers in Medicare and Medicaid plans. The company also has a Medicare pharmacy benefit business and manages commercial pharmacy benefits.
The vast majority of commercial customers are in self-funded health plans in which Cigna administers health benefits as a third party and the company or organization is responsible for the actual cost of covering its members.
Cigna has a small individual business and is offering plans in five states on the new Obamacare health insurance exchanges. These exchanges sell new plans created under President Barack Obama's healthcare reform law that include government subsidies based on income.
(Reporting by Caroline Humer; Editing by Lisa Von Ahn)