Cigna bumps annual profit forecast on tighter cost control
Cigna bumps annual profit forecast on tighter cost control
By Sriparna Roy and Sneha S KThu, April 30, 2026 at 12:03 PM UTC
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Signage for Cigna is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly
By Sriparna Roy and Sneha S K
April 30 (Reuters) - Cigna slightly raised its annual adjusted profit forecast on Thursday after beating first-quarter earnings estimates on lower-than-expected medical expenses.
Unlike many peers, Cigna no longer offers Medicare Advantage plans for seniors and people with disabilities and has taken steps to shrink the Obamacare business. It instead relies more on its pharmacy benefits segment and employer-sponsored healthcare plans.
The company is also shifting some customers to a new model that excludes after-market discounts, known as rebates, a move it says will squeeze margins over the next two years.
"We view the quarter as a solid start," said Barclays analyst Andrew Mok.
Shares of the company rose 1.3% in premarket trading.
Quarterly medical loss ratio, or the percentage of premiums spent on medical care, stood at 79.8% in the quarter. Analysts expected a ratio of 81.56%, according to LSEG data.
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The lower costs were due to the company selling its Medicare business to Health Care Service Corp.
For the reported quarter, adjusted revenue at its Evernorth health services unit, which houses its pharmacy benefit management unit and specialty pharmacy, rose nearly 9% to $58.44 billion.
Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients.
"This was a solid quarter for Cigna driven by pricing discipline in Healthcare and PBM margins modestly better than expected, and in line with the guidance direction we had expected," said Bernstein analyst Lance Wilkes.
Cigna now sees 2026 adjusted profit per share to be $30.35, up 10 cents from its previous expectations. Analysts expected $30.33 per share.
The company earned adjusted quarterly profit of $7.79 per share, surpassing analysts' estimate of $7.61 per share.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Pooja Desai)
Source: “AOL Money”
