Cigna Corporation (CI) delivered impressive third-quarter results, showcasing strong growth across its business segments. The company reported total sales of $63.7 billion, a significant 30% year-over-year increase, easily surpassing analysts’ expectations of $59.35 billion. This remarkable performance was fueled by the exceptional growth of Evernorth Health Services, Cigna’s subsidiary focused on providing a range of healthcare solutions.
Evernorth’s success was driven by a combination of factors, including significant client wins and robust growth in specialty services. The company’s adjusted income from operations for the quarter also saw a positive 5% increase, primarily attributed to Evernorth’s contributions, particularly within Specialty and Care Services. This growth was partially offset by a decline in net investment income.
In the core Cigna Healthcare segment, sales rose by 3% to reach $13.16 billion. This increase was driven by premium rate adjustments to account for anticipated medical cost increases, partially offset by a decrease in individual and family plan customers. Cigna’s medical cost ratio, which represents the percentage of premiums spent on claims, stood at 82.8% for the quarter, compared to 80.5% in the same period last year. This increase was attributed to the company’s business mix and an extra business day in the third quarter of 2024.
Evernorth Health Services, a key driver of Cigna’s overall success, witnessed a remarkable 36% increase in sales, reaching $52.64 billion. This segment, which includes pharmacy benefit services, saw sales soar by 50% to $28.79 billion.
Despite the overall revenue growth, Cigna’s total medical customer base declined by 2.9% to 19.05 million. However, the company experienced significant growth in customer relationships, which increased by 12% to 183.51 million. The number of total pharmacy customers also saw a substantial increase, rising by 22% to 120 million.
Cigna’s adjusted earnings per share (EPS) for the third quarter came in at $7.51, surpassing analyst estimates of $7.20 and representing an increase from $6.77 a year ago.
Looking ahead, Cigna reaffirmed its adjusted EPS guidance for 2024, projecting at least $28.40, slightly below the consensus estimate of $28.50. The company anticipates a fiscal year 2024 medical cost ratio of 81.7%-82.5%.
Following the release of these positive results, CI stock experienced a 3.93% surge, closing at $325.18 on Thursday. This strong performance reflects investor confidence in Cigna’s ability to navigate the evolving healthcare landscape and maintain its growth trajectory.
The company’s focus on expanding its Evernorth Health Services business, coupled with its commitment to delivering innovative healthcare solutions, positions Cigna for continued success in the years to come. Investors and industry observers will be closely watching Cigna’s progress as it continues to navigate the dynamic healthcare landscape.
