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Cigna (CI) to Report Q4 Earnings: What's in the Offing?

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Cigna Corporation (CI - Free Report) is set to report fourth-quarter 2020 results on Feb 4, before the opening bell.

In the third quarter, the company’s earnings of $4.41 per share outpaced the Zacks Consensus Estimate by 3.8% and but declined 2.9% year over year. Results highlighted robust performances across the company’s business portfolio, the return of the medical utilization to more typical levels and the COVID-19 related impacts.

Factors to Note

Strong performances across its Evernorth, U.S. Medical and International Markets businesses are likely to have contributed to the to-be-reported quarter’s revenues. However, the ongoing COVID-19 related impacts including continued testing and treatment costs might have resulted in medical utilization to stay at more typical levels.

Delving deeper into the company’s segments, the Evernorth unit, which was rebranded in September 2020, might have gained momentum from a growing customer base and higher pharmacy scripts volumes in the to-be-reported quarter. Enhanced specialty pharmacy services provided through Cigna’s leading specialist pharmacy Accredo are likely to have benefited the company's performance in the quarter to be reported.

In the fourth quarter, the U.S. Medical business is likely to have benefited on the back of customer growth across the company’s Select segment and Medicare Advantage business, and rise in premiums and return of the health insurance tax. However, continuity in pandemic-related costs and persistent dislocation across the broader labor market resulting in modestly higher commercial disenrollment might have weighed on the fourth-quarter performance.

The International Markets business are likely to have benefited from momentum from enhanced operational efficiencies, business growth and reduced claims stemming from COVID-19 pandemic.

Numerous cost-curbing initiatives might have offset the company’s SG&A expenses to some extent in the to-be-reported quarter.

Q4 Estimates

The Zacks Consensus Estimate for the company’s earnings is pegged at $3.66 per share, indicating a decline of 15.1% from the year-ago quarter’s reported figure.

The consensus mark for revenues stands at $40 billion, indicating rise of 9.5% from the prior-year quarter.

Earnings Surprise History

The company boasts of a stellar earnings surprise track. Its bottom line surpassed estimates in each of the trailing four quarters, the average surprise being 6.83%. This is depicted in the chart below:

Cigna Corporation Price and EPS Surprise

Cigna Corporation Price and EPS Surprise

Cigna Corporation price-eps-surprise | Cigna Corporation Quote

What Our Quantitative Model Predicts

Our proven model predicts an earnings beat for Cigna this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Earnings ESP: Cigna has an Earnings ESP of +1.96%. This is because the Most Accurate Estimate of $3.73 is pegged higher than the Zacks Consensus Estimate of $3.66. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Cigna carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks to Consider

Some other stocks worth considering from the healthcare space with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Tenet Healthcare Corporation (THC - Free Report) has an Earnings ESP of +8.32% and a Zacks Rank #1.

Meridian Bioscience, Inc. (VIVO - Free Report) has an Earnings ESP of +3.94% and a Zacks Rank of 2 at present.

Pacific Biosciences of California, Inc. (PACB - Free Report) has an Earnings ESP of +4.65% and a Zacks Rank #3, currently.

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