Cigna Reports $1.4B Q3 Profit On Health Plan, Evernorth Growth; Lifts Annual Guidance

Cigna Corporation CI has reported Q3 FY23 sales of $49.08 billion, up 8% Y/Y, beating the consensus of $48.20 billion, reflecting strong growth across Evernorth Health Services and Cigna Healthcare.

Cigna Healthcare Q3 adjusted sales increased 14% Y/Y to $12.77 billion, reflecting customer growth and premium rate increases to cover underlying medical cost trends.

Cigna saw that its medical cost ratio - or spending on claims as a percentage of premiums - was 80.5% compared to 80.8% a year ago, reflecting continued strong performance in U.S. Commercial business driven by affordability initiatives and effective pricing execution, partially offset by business mix, reflecting higher customer growth in U.S. Government.

Total premiums during the quarter rose 15% to $10.99 billion. 

Total medical customers grew 9% from December 31, 2022, to 19.6 million, primarily driven by growth in U.S. Commercial fee-based customers and Individual and Medicare Advantage customers.

Total pharmacy customers increased 5% to 98.3 million.

Revenue from Cigna's Evernorth unit, engaged in the pharmacy benefit management business, rose 8% to $38.59 billion, reflecting strong organic growth in specialty and care delivery and management solutions.

The adjusted EPS of $6.77, down from $6.05 a year ago, beat the Wall Street estimate of $6.67.

Guidance: Cigna revises its FY23 adjusted EPS guidance of at least $24.75 versus prior guidance of $24.70 and consensus of $24.82.

It projects FY23 revenues of at least $192 billion vs. a consensus of $191.86 billion and $190 billion expected earlier.

For FY23, the company expects total Medical Customer Growth (lives) of at least 1,600,000, compared to prior guidance of 1,400,000.

Cigna sees an FY23 medical cost ratio of 81.5%-82.0% compared to 81.5%-82.3%.

Price Action: CI shares are up 0.87% at $312.11 on the last check Thursday.