Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Healthways Falls Most Since 1991 on Loss of Cigna Revenue

Oct. 25 (Bloomberg) -- Healthways Inc., a manager of diabetes and heart disease services, fell 44 percent, a record drop, after the company said it expected to lose a contract with insurer Cigna Corp., cutting into revenue.

Healthways plummeted to $6.31 at 4 p.m. New York time for the biggest decline since the company first sold shares to the public in August 1991. Franklin, Tennessee-based Healthways is down 43 percent this year.

Cigna, the fifth-largest U.S. insurer, told Healthways it will begin to wind down its contract next year before it expires in February 2013, Healthways said in a statement yesterday. That will reduce revenue by $60 million to $65 million, the company said. Cigna said yesterday it agreed to buy health-maintenance organization Healthspring Inc. for $3.8 billion.

“The loss of the Cigna contract could reduce earnings per share by 50 cents to 65 cents by 2013, potentially eliminating over half the company’s earnings base,” Scott Fidel, an analyst with Deutsche Bank Securities Inc., wrote in a research note today. It “creates a major headwind to 2012-2013 prospects.”

To contact the reporter on this story: Meg Tirrell in New York at mtirrell@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.