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Reuters
31-07-2025
- Business
- Reuters
Cigna's health services business powers Q2 earnings beat
July 31 (Reuters) - Cigna (CI.N), opens new tab beat Wall Street estimate for second-quarter profit on Thursday, helped by strength in its pharmacy benefit management business. The company was among the last major health insurers to report quarterly results, in a period marked by high medical costs in government-backed plans. Cigna, however, was able to shield itself from the broader industry trend as it divested its Medicare business to Health Care Service Corp and relies more on pharmacy benefits and fee-based commercial insurance. The company has intentionally structured its portfolio to suit current conditions, CEO David Cordani said on a post-earnings call. "We have no exposure to Medicaid or Medicare, instead choosing to serve these customers through our Evernorth services portfolio." Medicaid plans are for low-income people, while Medicare Advantage is for people aged 65 and older or with disabilities. Revenue from Cigna's Evernorth healthcare services unit, which includes its pharmacy benefit management business, rose 17% to $57.83 billion during the quarter. Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients. But the company also said it expects costs to remain elevated throughout the year and into next year, and has priced 2026 accordingly. It reported a medical care ratio — the percentage of premiums spent on medical care — of 83.2% during the quarter, higher than the 82.3% a year ago. Cigna attributed the rise to higher stop-loss medical costs, which protect employers from large claims. Shares of the company dropped 6% in morning trading. Baird analyst Michael Ha said the stock dip may reflect stop-loss concerns, but called the reaction "overdone". Cigna forecast 2025 medical care ratio to be between 83.2% and 84.2%, with the third-quarter ratio expected to be toward the upper end of that range. Its second-quarter adjusted per-share profit of $7.20 topped analysts' estimate of $7.15, according to data compiled by LSEG. The company maintained its annual adjusted profit forecast of at least $29.60 per share, while analysts expect $29.68 per share.
Forbes
31-07-2025
- Business
- Forbes
Cigna Profits Hit $1.5 Billion Despite Higher Costs
The Cigna Group reported a second quarter profit of $1.5 billion as its Evernorth health service business performs well and despite rising costs in its employer health benefits business. Cigna, which includes Evernorth and one of the nation's largest pharmacy benefit management companies, said net income was $1.5 billion, or $5.71 per share in the second quarter of this year. That compares with $1.5 billion, or $5.45 per share, in the second quarter 2024. Meanwhile, total revenues for the second quarter 2025 rose 11% to $67.2 billion. 'Adjusted income from operations for second quarter 2025 increased 1% relative to second quarter 2024, reflecting strong growth in Evernorth Health Services and improvement in Corporate, partially offset by expected higher stop loss medical costs in Cigna Healthcare,' the company said. Cigna's medical cost issues are different than those of health insurance industry rivals that have struggled largely in their businesses providing government-subsidized health insurance coverage such as Medicaid benefits for the poor and Medicare Advantage for the elderly. Cigna earlier this year completed the sale of its Medicare businesses to Health Care Service Corp., an operator of Blue Cross and Blue Shield plans in five states. In Cigna's case, the company Thursday said its results were impacted by higher 'stop loss medical costs.' Under such policies, Cigna becomes liable for losses that exceed certain limits set up between the insurer and an employer's self-funded policy. Cigna didn't disclose the specific reason for the higher cost in its stop loss offering. But the stop loss offering impacted Cigna's medical cost ratio, which is the percentage of premium revenue that goes toward medical costs. Cigna's medical cost ratio increased in the second quarter to 83.2% compared to 82.3% in the year-ago period. Despite the stop loss issue, Cigna reaffirmed its 2025 outlook for adjusted income from operations of "at least $29.60 per share.' 'Listening, adapting, and innovating to meet the evolving needs of our patients, customers, and clients enables us to deliver meaningful value,' David M. Cordani, chairman and CEO of The Cigna Group said in a statement accompanying the company's second quarter earnings report. 'Our performance in the second quarter reflects our disciplined execution and the strength of our business mix.' Cigna's Evernorth health services business, which includes one of the nation's largest pharmacy benefit management companies in Express Scripts, grew 'existing client relationships' and experienced 'strong specialty pharmacy growth,' the company said. 'Total pharmacy customers at June 30, 2025 increased 3% from December 31, 2024 to 121.9 million due to new sales and the continued expansion of relationships,' Cigna said.
Time of India
02-05-2025
- Business
- Time of India
Cigna raises full-year profit forecast, latest to beat medical cost estimates
London: Cigna on Friday raised its full-year earnings forecast and beat estimates for quarterly profit, helped by strong performance in its pharmacy benefit management business and lower-than-expected medical costs in its insurance arm. The company is the latest insurer to outperform estimates, days after industry bellwether UnitedHealth rattled investor confidence in the sector as it missed quarterly estimates for the first time since 2008, and lowered its outlook for the full year, in part due to high medical costs in its Medicare Advantage plans . Cigna, however, is insulated from higher costs in MA plans, as it relies more on its pharmacy benefit management and commercial health insurance businesses. Last year, it signed a $3.3 billion deal to sell its Medicare business to Health Care Service Corp. The company's medical care ratio - the percentage of premiums spent on medical care - rose to 82.2 per cent in the reported quarter from 79.9 per cent a year earlier - but was lower than analysts' average expectation of 82.63 per cent, according to data compiled by LSEG. Cigna has, however, said it expects costs in its stop-loss insurance plans -- which help protect health plan sponsors, typically an employer, when medical claims pass a pre-designated threshold -- to be higher in 2025. The health insurer forecast an annual profit of at least $29.60 per share, compared with its previous estimate of $29.50 and analysts' estimate of $29.61. On an adjusted basis, the company's adjusted income from operations rose to $6.74 per share in the first quarter from $6.47 per share a year earlier, and came in above analysts' average estimate of $6.35. The company benefited from increased adoption of biosimilars of AbbVie's blockbuster arthritis drug, Humira. Biosimilars are cheaper versions of biologic drugs. Adjusted revenue from Cigna's Evernorth healthcare services unit, which includes its pharmacy benefit management business, jumped 16 per cent to $53.68 billion for the quarter.
