Merrill Lynch cut Cigna (CI ) to sell from neutral.
Analyst Roberta Goodman says the shortfall reflects deteriorating Employee Health Care and Life & Disability results. She notes the company said it is pursuing a major realignment of its health insurance functions. Given the magnitude of a challenge to revamp operations so completely, Goodman thinks it will take at least a year, or possibly longer to accomplish these moves.
Goodman says Cigna's operational and financial results are likely to continue to reflect the functional deficits that gave rise to this quarter's disappointment. She cut the $7.95 2002 earnings per share estimate to $6.65, and cut the $8.80 2003 estimate to $5.50.