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Cigna (CI) Q2 Earnings & Revenues Beat, 2018 View Raised

Zacks Equity Research
Updated

Cigna Corp. CI came up with adjusted earnings per share of $3.89 in second-quarter 2018, beating the Zacks Consensus Estimate by 16.8%.

The same was up 33.7% year over year. Strong performance across the company’s Global Health Care, Global Supplemental Benefits and Group Disability and Life businesses aided earnings.

Cigna posted revenues of $11.50 billion, surpassing the Zacks Consensus Estimate by 3.71%. Revenues grew 10% year over year, led by strong business growth in Cigna's Global Healthcare and Global Supplemental Benefits segments.

Cigna Corporation Price, Consensus and EPS Surprise

Cigna Corporation Price, Consensus and EPS Surprise | Cigna Corporation Quote

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Strong results pushed shares up 1.98% in pre-market trading.
Premiums were up 12% year over year to $9 billion, while fees increased 10% to $1.36 billion.

The company’s medical enrollment grew by 329,000 lives to 16.2 million customers driven by growth in Select, Individual and Middle Market segments.

Total benefits and expenses of $10.37 billion increased 12% year over year, led by higher global health care medical cost and operating expenses.

Strong Segment Performance

Global Health Care: Operating revenues of $9.15 billion were up 11.7% year over year driven by Commercial customer growth and expansion of specialty relationships, as well as premium increases consistent with the underlying cost trends.

Adjusted operating earnings were $789 million, up 33.5% year over year was due to medical and specialty business growth, strong medical cost performance, a lower tax rate and favorable prior year reserve development.

Global Supplemental Benefits: Operating revenues of $1.11 billion were up 15.8% year over year, reflecting continued business growth.

Adjusted operating income increased 12.4% year over year to $118 million, reflecting business growth and gains from expense management.

Global Disability and Life: Operating revenues of $1.13 billion were up 1.3% year over year from solid disability performance and favorable life results.

Adjusted operating income increased 24.1% year over year to $103 million.

Financial Position

Cash and marketable investments at the parent company were $1.2 billion at Jun 30, 2018 unchanged from the year end Dec 31, 2017 levels.

Long-term debt was $5.2 billion as of Jun 30, 2018, almost unchanged from the Dec 31, 2017 level.

2018 Guidance Raised

For 2018, the company expects to earn in the range of $13.60 and $13.90, up from the previous outlook range of $12.85 and $13.25, on a per share basis. Total revenue growth (kept unchanged) is expected to grow in the range of approximately 8% compared with the previous growth range of 7% to 8% and medical customers are projected to grow by 0.4 million to 0.5 million lives, (unchanged from the previous forecast).

Cigna which is due to acquire Express Scripts might face friction from billionaire investor Carl Icahn, who has upped his investment in Cigna to vote against the deal.

Zacks Rank and Other Releases

Cigna carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among the other health insurers that have reported second-quarter earnings so far, the bottom line of Anthem, Inc. ANTM, Centene Corporation CNC and UnitedHealth Group Incorporated UNH beat the respective Zacks Consensus Estimate.

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