Fitch lowered its rating on Cigna from neutral to negative, citing concerns about the company's underfunded pension, capital requirements for the company's reinsurance businesses, and an elevated debt to equity ratio.Moody's also lowered its rating to negative as well.
Cigna's net income fell 53% to $171 million, or 62 cents a share, from $365 million, or $1.28 a share, a year earlier.
On May 1st, CIGNA posted an 80% drop in first-quarter profits, which it attributed to a less effective quarter in its core health care unit and higher-than-usual payouts in its run-off reinsurance segment. In 1Q 2008, CIGNA earned 21 cents per share, in comparison to 98 cents per share in the first quarter of 2007. With this announcement, the company also cut back its 2008 earnings outlook. This caused shares to fall 4% on the 1st, reversing the trend of the past week. Source: Forbes.com
