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Cigna Profit Falls, Hurt by Charge at Reinsurance Unit

Health insurer Cigna said Wednesday that quarterly profit fell, hurt by a charge from a reinsurance business, but adjusted results beat its forecast as health-plan membership jumped.

The fourth-largest U.S. health insurer by market value also lifted its full-year profit range.

Net income fell to $198 million, or 68 cents per share, from $273 million, or 78 cents per share, a year earlier.

Cigna reported adjusted earnings from operations of 96 cents per share.

The adjusted results excluded a 19-cent after-tax charge tied to reserves for a discontinued reinsurance business and losses from other discontinued businesses.

The Philadelphia-based company had projected adjusted earnings of 82 to 90 cents per share for the second quarter on a split-adjusted basis.

Analysts, on average, had expected 88 cents per share, according to Reuters Estimates. It was not immediately clear whether that estimate was comparable.

Revenue rose nearly 7 percent to $4.38 billion.

Membership in Cigna's health plans rose 8.7 percent from a year earlier to 9.8 million members. Enrollment fell slightly from the first quarter.

Cigna continued to project that full-year membership would grow by 5 percent to 6.5 percent.

A closely watched gauge that measures the percent of premiums spent on medical costs improved to 84.5 percent from 87 percent a year earlier.

The company forecast full-year adjusted earnings of $3.55 per share to $3.75 per share. It previously had forecast $3.42 per share to $3.65 per share, on a split-adjusted basis.

Cigna shares have risen about 18 percent in 2007, outperforming shares of most of its rivals.

Cigna's report ends a mixed reporting season for large U.S. health insurers, which posted higher quarterly profits but in some cases failed to excite investors with their results.