PHILADELPHIA -- Cigna Corp. swung to a third-quarter profit after a hefty year-earlier charge, despite a drop in revenue. Insurance premiums rose slightly in the period.

In a conference call Friday, the insurance giant raised its earnings forecast for the current year and said it expects profits in its health-care business to climb 10% in 2004.

Net income for the third quarter was $195 million, or $1.39 a share, compared with a loss of $877 million, or $6.27 a share, in the year-earlier period.

Cigna has been moving to restore the business since last year, when technology glitches and the underpricing of some health-insurance products caused the business to dive in profitability. To step up efforts, Cigna Chief Executive H. Edward Hanway took control of the company's health-care operations in July.

Results for the latest quarter included an investment gain of $32 million and a charge of $37 million to cover costs related to a recent class-action settlement with physicians. In September, Cigna said the charge would be about $40 million, and the company had taken a $50 million charge in the fourth quarter of 2002 in anticipation of the settlement costs.

The year-earlier results included charges totaling $1.04 billion related to the closure of Cigna's reinsurance business. The bulk of the charges -- $720 million -- covered reinsurance contracts that guaranteed minimum death benefits on some annuity products.

Cigna said income from continuing operations before investment gains and special items was $204 million, or $1.45 a share, compared with $202 million, or $1.45 a share, last year.

Revenue fell 6.1% to $4.77 billion from $5.08 billion.

Operating profit in the health-care business fell 6% to $121 million. Enrollment dropped 10% to 11.78 million as of Sept. 30, and for all 2003, membership is expected to fall between 10% and 11%. Earnings from its disability and life-insurance segments rose.

In the conference call, Chief Financial Officer Mike Bell said Cigna's health-care business should generate profits of $450 million to $500 million in 2004, up from $425 million to $440 million in 2003, as the company raises premiums and curbs rising medical costs.

The company now expects full-year 2003 earnings between $5.35 a share and $5.55 a share, up from a July forecast of $5 to $5.25 a share but still lower than a previous estimate of $6.25 to $6.50 a share. For 2004, Mr. Bell said the company forecasts earnings between $5.55 and $5.95 a share. In 2002, Cigna posted a loss of $6.65 a share.

Consolidated unpaid claims and claim expenses were $4.5 billion as of Sept. 30. Total premiums and premium equivalents were slightly higher, as increased medical cost inflation in the service business was offset by the impact of lower medical membership.

Prudential Financial Inc. is in the late stages of talks to buy Cigna's retirement and investment-products division for about $2 billion, according to people close to the transaction.