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Cigna reports Q1 profit beat on health services unit strength -Breaking

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© Reuters. Cigna sign at Queens health center, New York City. (c) Reuters. REUTERS/Andrew Kelly

(Reuters) – Cigna Corp (NYSE) reported a better than expected first quarter profit Friday. This was due to the growth of its health service unit, which includes its pharmacy benefits management business. It also modestly raised its full year adjusted profit forecast.

Volatility in medical costs during the pandemic has put pressure on health insurance companies. Some of this was compensated by people putting off non-urgent procedures.

Cigna’s health service unit Evernorth saw growth of 30% in the last quarter. This was compared with $30.62 Billion a year prior.

Cigna has moderately increased its 2022 adjusted profit margin from operations forecast to at least $22.60 per shares, compared with its previous estimate of minimum $22.40 per shareholder.

Anthem (NYSE:) raised its 2022 adjusted profits view. Anthem, a competitor in size, and UnitedHealth Group (NYSE :), also increased theirs last month. UnitedHealth, an industry bellwether, indicated that, although deferred procedure demand is approaching normal levels and has not increased to the extent feared, it was still low, leading both to lower claims as well as costs.

Cigna’s MCR (the ratio of income from premiums to medical claims) fell to 81.5% from 80.9% one year ago. This was partly because of higher medical expenses.

Cigna earned $6.01 per share from operations, excluding special items. This is higher than analysts’ average estimate $5.18 according to data Refinitiv IBES.

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