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Cigna Profit Up 10% On Higher Medical Memberships

Health insurer Cigna said fourth-quarter profit rose 10% as medical membership increased.

Net income rose to $232 million, or $2.28 a share, from $210 million, or $1.67 a share, a year earlier.

Earnings in the latest period included a legal settlement charge of $25 million and a charge of $23 million to make operational changes at its health-care unit. Meanwhile, the year-ago period included a gain of $4 million related to the sale of Cigna's retirement-benefits business.

Adjusted for these special items and investment results, Cigna said its adjusted income from operations rose to $2.61 a share from $1.87 a share a year ago.

Revenue fell slightly to $4.2 billion, while revenue from premiums and fees rose less than 1% to $3.57 billion.

Cigna was expected to earn $2.27 a share on revenue of $4.18 billion, according to a Thomson Financial consensus estimate.

Enrollment in Cigna's health plans increased 3% to 9.39 million members in the latest period.

The company narrowed its forecast for such membership to a range of 5% to 6%, excluding any acquisitions. Previously, the company estimated a 4% to 6% increase in health-plan enrollment this year and a double-digit percentage gain in earnings in its health-benefits.

Cigna estimates first-quarter consolidated adjusted income from operations of $235 million to $255 million, or $2.35 to $2.55 a share, including $155 million to $165 million for the health-care segment.

For 2007, Cigna expects adjusted income from operations to range from $1 billion to $1.06 billion, or $9.95 to $10.55 a share, including $665 million to $175 million for the health-care segment.