Cigna Corp. said last week that it expects earnings growth in 2012, but the health insurer's prospects will get a more significant boost in 2013, according to a Citi analyst.
Just days before, on Oct. 24, Cigna said it would buy fellow insurer and Medicare Advantage plan provider HealthSpring Inc. for $3.8 billion.
THE OPINION: Analyst Carl McDonald said Cigna's earnings may not grow much next year, due in part to costs from that deal and an accounting standards change that may reduce international earnings. But he said that the HealthSpring acquisition will boost earnings substantially in 2013.
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By then, the insurer will benefit from a full year of HealthSpring revenue, have no integration or transaction costs from the deal and likely resume share repurchases, which lift earnings per share.
He expects earnings of $5.30 per share in 2011, $5.55 per share in 2012 and $6.35 per share in 2013.
THE STOCK: Down 68 cents, or 1.6 percent, to $42.51 in afternoon trading while the Dow Jones industrial average rose 1.3 percent.
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