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CIGNA Reports Lower Net Income

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NU Online News Service, April 30, 2004, 3:55 p.m. EDT – An accounting change cut net results at CIGNA Corp., Philadelphia, during the first quarter.[@@]

The managed care company is reporting $78 million in net income for the quarter on $4.7 billion in revenue, down from $236 million in net income on $4.9 billion in revenue for the first quarter of 2003.

First-quarter net income includes $49 million in restructuring charges and $150 million in charges related to accounting changes, CIGNA says.

The company ended the quarter providing or administering coverage for 10.2 million people, down from 12.3 million people a year earlier.

Average health revenue per health member increased 7.1%, to $273.

Membership was down because of a drop in new sales and a drop in retention of existing accounts, CIGNA says.

But CIGNA notes that earnings at its core health operations increased to $185 million, from $121 million, thanks to cuts in operating expenses and successful efforts to hold down increases in claims costs.