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Cigna (CI) Q4 Earnings Top on U.S. Commercial Unit, Dividend Up
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Cigna Corporation (CI - Free Report) reported fourth-quarter 2022 adjusted earnings of $4.96 per share, which outpaced the Zacks Consensus Estimate by 2.5% and our estimate of $4.84 per share. The bottom line advanced 4% year over year.
Adjusted revenues inched up 0.1% year over year to $45,743 million, thanks to better pharmacy revenues coupled with higher fees and other revenues. The top line beat the consensus mark by a whisker and exceeded our estimate of $44,354.2 million.
The quarterly results were aided by solid performance of the Evernorth business, strong membership growth and a decline in expense level.
Cigna’s medical customer base came in at 18 million, which grew 5.4% year over year as of Dec 31, 2022. The growth came on the back of a well-performing U.S. Commercial business. The reported figure matched both the consensus mark and our estimate.
Total benefits and expenses declined 0.3% year over year to $44,026 million in the quarter under review. The adjusted selling, general and administrative (SG&A) expense ratio of 7.6% deteriorated 20 basis points (bps) year over year.
Cigna Corporation Price, Consensus and EPS Surprise
Evernorth: Adjusted revenues in the segment rose 3% year over year to $36,188 million on the back of solid organic growth in specialty pharmacy services. The reported figure beat our estimate of $34,238.9 million.
Adjusted operating income on a pretax basis came in at $1,725 million, which grew 6% year over year but lagged the Zacks Consensus Estimate of $1,749 million. The metric witnessed a year-over-year increase resulting from steady affordability enhancements and business growth.
Cigna Healthcare: The segment recorded adjusted revenues of $11,131 million in the fourth quarter, which dipped 1% year over year but outpaced our estimate of $9,820.1 million. The decline in U.S. Government medical customers and net investment income accounted for the year-over-year decrease in the segmental revenues.
Adjusted operating income on a pretax basis advanced 6% year over year to $500 million on the back of an improved Medical care ratio (MCR). The metric, however, fell shy of the consensus mark of $511 million.
The segment’s MCR of 84% improved 300 bps year over year at the fourth-quarter end, courtesy of reduced direct COVID costs and better stop-loss results.
Financial Position (as of Dec 31, 2022)
Cigna exited the fourth quarter with cash and cash equivalents of $5,924 million, which increased 16.6% from the 2021-end level. Total assets of $143.9 billion fell 7.1% from the figure as of Dec 31, 2021.
Long-term debt amounted to $28,100 million, which declined 9.7% from the 2021-end level. Short-term debt totaled $2,993 million.
Shareholders’ equity of $44,872 million tumbled 4.8% from the figure in 2021 end.
During 2022, net cash provided by operating activities came in at $8,656 million, which climbed 20.4% year over year.
Debt-to-capitalization ratio of 40.9% at the fourth-quarter end improved 80 bps year over year.
Share Repurchase Update
Cigna bought back 27.4 million shares of common stock worth $7.6 billion in 2022.
Dividend Hike Announced
On Feb 2, 2023, Cigna’s board of directors approved a 10% hike in the quarterly cash dividend. The increased dividend amounting to $1.23 per share will be paid out on Mar 23, 2023 to shareholders of record as on Mar 8.
2023 Guidance
Adjusted revenues are anticipated at a minimum of $187 billion this year. The outlook indicates growth of at least 3.5% from the 2022 reported figure of $180.5 billion.
Adjusted earnings per share are predicted to be a minimum of $24.60, which suggests minimum growth of 5.7% from the 2022 figure of $23.27.
CI forecasts total medical customer growth of at least 1,200,000 in 2023.
MCR is expected within 81.5-82.5%. The adjusted SG&A expense ratio is estimated at roughly 7.3% for this year.
Adjusted operating income on a pretax basis for Evernorth and Cigna Healthcare businesses is anticipated at around $6,400 million and $4,400 million, respectively.
Operating cash flow is projected to be a minimum of $9,000 million. Meanwhile, capital expenditures are estimated at around $1,400 million.
Long-Term Targets
Cigna expects to achieve average annual adjusted earnings per share growth within 10-13% in the long term.
Over the 2022-2026 period, management expects CI to generate operating cash flows of roughly $50 billion.
Of the Medical sector players that have reported fourth-quarter results so far, the bottom lines of Thermo Fisher Scientific Inc. (TMO - Free Report) , Elevance Health Inc. (ELV - Free Report) and Humana Inc. (HUM - Free Report) beat the Zacks Consensus Estimate.
Thermos Fisher reported fourth-quarter 2022 adjusted earnings per share of $5.40 beating the Zacks Consensus Estimate by 4.1%. However, the figure declined 17% year over year. Revenues in the quarter under review grossed $11.45 billion, up 6.9% year over year. The top line exceeded the Zacks Consensus Estimate by 10.6%. Organic revenues of TMO in the reported quarter declined 3% year over year, while currency translation lowered revenues by 4%. Products added with acquisitions boosted revenues by 14%.
Elevance Health’s fourth-quarter 2022 earnings of $5.23 per share beat the Zacks Consensus Estimate of $5.20 by 0.6%. Additionally, the bottom line advanced 1.8% year over year. ELV’s operating revenues improved 10.1% year over year to $39,667 million in the quarter under review. The top line missed the consensus mark by a whisker. Medical membership of Elevance Health as of Dec 31, 2022, totaled 47.5 million, which rose 4.8% year over year in the fourth quarter. Premiums of $33,646 million rose 9.4% year over year.
Humana reported fourth-quarter 2022 adjusted earnings per share of $1.62, beating the Zacks Consensus Estimate by 11%. The bottom line climbed 30.6% year over year. Revenues of HUM amounted to $22,439 million, which rose 6.6% year over year in the quarter under review. Yet, the top line fell short of the consensus mark by a whisker. Total premiums of HUM grew 7.3% year over year to $21,275 million.
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Cigna (CI) Q4 Earnings Top on U.S. Commercial Unit, Dividend Up
Cigna Corporation (CI - Free Report) reported fourth-quarter 2022 adjusted earnings of $4.96 per share, which outpaced the Zacks Consensus Estimate by 2.5% and our estimate of $4.84 per share. The bottom line advanced 4% year over year.
Adjusted revenues inched up 0.1% year over year to $45,743 million, thanks to better pharmacy revenues coupled with higher fees and other revenues. The top line beat the consensus mark by a whisker and exceeded our estimate of $44,354.2 million.
The quarterly results were aided by solid performance of the Evernorth business, strong membership growth and a decline in expense level.
Cigna’s medical customer base came in at 18 million, which grew 5.4% year over year as of Dec 31, 2022. The growth came on the back of a well-performing U.S. Commercial business. The reported figure matched both the consensus mark and our estimate.
Total benefits and expenses declined 0.3% year over year to $44,026 million in the quarter under review. The adjusted selling, general and administrative (SG&A) expense ratio of 7.6% deteriorated 20 basis points (bps) year over year.
Cigna Corporation Price, Consensus and EPS Surprise
Cigna Corporation price-consensus-eps-surprise-chart | Cigna Corporation Quote
Segmental Performances
Evernorth: Adjusted revenues in the segment rose 3% year over year to $36,188 million on the back of solid organic growth in specialty pharmacy services. The reported figure beat our estimate of $34,238.9 million.
Adjusted operating income on a pretax basis came in at $1,725 million, which grew 6% year over year but lagged the Zacks Consensus Estimate of $1,749 million. The metric witnessed a year-over-year increase resulting from steady affordability enhancements and business growth.
Cigna Healthcare: The segment recorded adjusted revenues of $11,131 million in the fourth quarter, which dipped 1% year over year but outpaced our estimate of $9,820.1 million. The decline in U.S. Government medical customers and net investment income accounted for the year-over-year decrease in the segmental revenues.
Adjusted operating income on a pretax basis advanced 6% year over year to $500 million on the back of an improved Medical care ratio (MCR). The metric, however, fell shy of the consensus mark of $511 million.
The segment’s MCR of 84% improved 300 bps year over year at the fourth-quarter end, courtesy of reduced direct COVID costs and better stop-loss results.
Financial Position (as of Dec 31, 2022)
Cigna exited the fourth quarter with cash and cash equivalents of $5,924 million, which increased 16.6% from the 2021-end level. Total assets of $143.9 billion fell 7.1% from the figure as of Dec 31, 2021.
Long-term debt amounted to $28,100 million, which declined 9.7% from the 2021-end level. Short-term debt totaled $2,993 million.
Shareholders’ equity of $44,872 million tumbled 4.8% from the figure in 2021 end.
During 2022, net cash provided by operating activities came in at $8,656 million, which climbed 20.4% year over year.
Debt-to-capitalization ratio of 40.9% at the fourth-quarter end improved 80 bps year over year.
Share Repurchase Update
Cigna bought back 27.4 million shares of common stock worth $7.6 billion in 2022.
Dividend Hike Announced
On Feb 2, 2023, Cigna’s board of directors approved a 10% hike in the quarterly cash dividend. The increased dividend amounting to $1.23 per share will be paid out on Mar 23, 2023 to shareholders of record as on Mar 8.
2023 Guidance
Adjusted revenues are anticipated at a minimum of $187 billion this year. The outlook indicates growth of at least 3.5% from the 2022 reported figure of $180.5 billion.
Adjusted earnings per share are predicted to be a minimum of $24.60, which suggests minimum growth of 5.7% from the 2022 figure of $23.27.
CI forecasts total medical customer growth of at least 1,200,000 in 2023.
MCR is expected within 81.5-82.5%. The adjusted SG&A expense ratio is estimated at roughly 7.3% for this year.
Adjusted operating income on a pretax basis for Evernorth and Cigna Healthcare businesses is anticipated at around $6,400 million and $4,400 million, respectively.
Operating cash flow is projected to be a minimum of $9,000 million. Meanwhile, capital expenditures are estimated at around $1,400 million.
Long-Term Targets
Cigna expects to achieve average annual adjusted earnings per share growth within 10-13% in the long term.
Over the 2022-2026 period, management expects CI to generate operating cash flows of roughly $50 billion.
Zacks Rank
Cigna currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported fourth-quarter results so far, the bottom lines of Thermo Fisher Scientific Inc. (TMO - Free Report) , Elevance Health Inc. (ELV - Free Report) and Humana Inc. (HUM - Free Report) beat the Zacks Consensus Estimate.
Thermos Fisher reported fourth-quarter 2022 adjusted earnings per share of $5.40 beating the Zacks Consensus Estimate by 4.1%. However, the figure declined 17% year over year. Revenues in the quarter under review grossed $11.45 billion, up 6.9% year over year. The top line exceeded the Zacks Consensus Estimate by 10.6%. Organic revenues of TMO in the reported quarter declined 3% year over year, while currency translation lowered revenues by 4%. Products added with acquisitions boosted revenues by 14%.
Elevance Health’s fourth-quarter 2022 earnings of $5.23 per share beat the Zacks Consensus Estimate of $5.20 by 0.6%. Additionally, the bottom line advanced 1.8% year over year. ELV’s operating revenues improved 10.1% year over year to $39,667 million in the quarter under review. The top line missed the consensus mark by a whisker. Medical membership of Elevance Health as of Dec 31, 2022, totaled 47.5 million, which rose 4.8% year over year in the fourth quarter. Premiums of $33,646 million rose 9.4% year over year.
Humana reported fourth-quarter 2022 adjusted earnings per share of $1.62, beating the Zacks Consensus Estimate by 11%. The bottom line climbed 30.6% year over year. Revenues of HUM amounted to $22,439 million, which rose 6.6% year over year in the quarter under review. Yet, the top line fell short of the consensus mark by a whisker. Total premiums of HUM grew 7.3% year over year to $21,275 million.