Cigna's Strong Performance Across Businesses Drive Q1 Earnings Beat; Raises 2021 Guidance

Cigna Corp CI reports Q1 total revenues of $41.9 billion, slightly ahead of the consensus of $40.2 billion, reflecting strong contributions from each of Cigna's ongoing businesses.
Q1 Adjusted EPS of $4.73 compared with $4.69 a year ago beat the $4.38 consensus. GAAP EPS improved to $3.30 from $3.15 a year ago.
The pharmacy customer base grew to 101.0 million, up 28% Y/Y, and an organic increase of 2.2 million YTD, driven by strong ongoing retention and new sales.
The total medical customer base reached 16.7 million, increasing 30,000 customers YTD, though down 3% Y/Y.
The growth was driven by Individual business, Select segment, and Medicare Advantage, partially offset by Commercial disenrollment throughout the quarter.
Evernorth adjusted revenues increased 13% Y/Y $30.6 billion driven by strong organic growth, including growth in retail network and specialty pharmacy services.
Cigna fulfilled 393 million adjusted pharmacy scripts, an increase of 9% Y/Y.
U.S. Medical adjusted revenues grew 5% to $10.4 billion, reflecting customer growth in Medicare Advantage, the Individual business, and the Select Segment, as well as premium increases and favorable net investment income.
The debt-to-capitalization ratio was 39.9%, in line with the long-term target of approximately 40%.
The SG&A expense ratio was 8.0%, a decrease from 8.5% from Q1 2020, driven by revenue growth, continued expense efficiency, and the repeal of the health insurance industry tax.
Guidance: Cigna sees FY21 sales of at least $166 billion versus $165.76 billion consensus, with Adjusted EPS of at least $20.2 versus the consensus of $20.26. This outlook includes approximately $1.25 per share in net unfavorable impacts of COVID-19.
It anticipates total Medical Customer Growth (lives) of at least 350,000.
Price Action: CI shares closed 0.6% lower at $256.93 on Thursday.

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