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Cigna (CI) Beats on Q1 Earnings and Revenues, Guides Up
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Cigna Corp. (CI - Free Report) reported first-quarter 2017 operating net earnings of $2.77 per share, comfortably beating the Zacks Consensus Estimate of $2.44 and increasing 19% year over year. Earnings beat reflected strong contribution from each of the company’s business segments.
Net revenue of $10.34 billion outpaced the Zacks Consensus Estimate of $9.94 billion. Further, revenues were up 5% year over year. Premiums of $8.1 billion increased 4.6% year over year, while mail order pharmacy revenues grew 1.9%.
The company had total 15.7 million medical customers as of Mar 31, 2017.
Quarterly Review by Segment
Global Health Care: Premiums and fees from the segment increased 4% year over year to $7.34 billion. The improvement was driven by customer growth and specialty contributions in the company’s Commercial employer group. However, the upside was partially offset by reductions in Government customers.
Adjusted operating earnings were $610 million, up 12% year over year on favorable prior-year reserve development.
Global Supplemental Benefits: Premiums and fees from this segment climbed 12.6% year over year to $869 million on the back of continued business growth.
Adjusted operating income increased 10.4% year over year to $74 million, reflecting business growth and strong operating expense management.
Global Disability and Life: Premiums and fees also increased 0.4% year over year to $1.03 billion, primarily driven by consistent business growth across disability and life products.
Adjusted operating income increased to $68 million from $15 million in the year-ago quarter, reflecting continued stable life results as well as further improvement in disability performance.
Corporate and Other Operations: This segment reported adjusted loss from operations of $33 million, wider than a loss of $25 million in the prior-year quarter.
Financial Position
Cash and marketable investments were $2.7 billion at Mar 31, 2017 and $2.8 billion at year-end 2016.
Year to date, the company has repurchased 2.3 million shares of common stock for approximately $340 million.
2017 Guidance
Cigna pulled up its 2017 earnings guidance after strong first-quarter results. It expects adjusted income from operations the range of $2.41 billion to $2.53 billion, or $9.25 to $9.75 per share, up from the previous estimate of $9.00–$9.50.
It expects revenues to grow 3% to 4% from the previous growth range of 2% to 3%. The company expects global medical customer growth in the range of 0.5 million to 0.6 million, up from the earlier range of 0.3 million to 0.5 million. Cigna also anticipates adjusted income from operations for Global Health Care in the band of $2.065–$2.135 billion ($2.03–$2.11 billion). Global Supplemental Benefits remains unchanged at $295–$315 million and Group Disability and Life is expected at $230–260 million (previously $200–$230 million). For the Corporate and Other segment, the company retained its earlier expectation of an adjusted loss from operations of $180 million.
Cigna Corporation Price, Consensus and EPS Surprise
Among the other firms in the health care sector that have reported their first-quarter earnings so far, the bottom line at Aetna Inc. , Humana Inc. (HUM - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
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Cigna (CI) Beats on Q1 Earnings and Revenues, Guides Up
Cigna Corp. (CI - Free Report) reported first-quarter 2017 operating net earnings of $2.77 per share, comfortably beating the Zacks Consensus Estimate of $2.44 and increasing 19% year over year. Earnings beat reflected strong contribution from each of the company’s business segments.
Net revenue of $10.34 billion outpaced the Zacks Consensus Estimate of $9.94 billion. Further, revenues were up 5% year over year.
Premiums of $8.1 billion increased 4.6% year over year, while mail order pharmacy revenues grew 1.9%.
The company had total 15.7 million medical customers as of Mar 31, 2017.
Quarterly Review by Segment
Global Health Care: Premiums and fees from the segment increased 4% year over year to $7.34 billion. The improvement was driven by customer growth and specialty contributions in the company’s Commercial employer group. However, the upside was partially offset by reductions in Government customers.
Adjusted operating earnings were $610 million, up 12% year over year on favorable prior-year reserve development.
Global Supplemental Benefits: Premiums and fees from this segment climbed 12.6% year over year to $869 million on the back of continued business growth.
Adjusted operating income increased 10.4% year over year to $74 million, reflecting business growth and strong operating expense management.
Global Disability and Life: Premiums and fees also increased 0.4% year over year to $1.03 billion, primarily driven by consistent business growth across disability and life products.
Adjusted operating income increased to $68 million from $15 million in the year-ago quarter, reflecting continued stable life results as well as further improvement in disability performance.
Corporate and Other Operations: This segment reported adjusted loss from operations of $33 million, wider than a loss of $25 million in the prior-year quarter.
Financial Position
Cash and marketable investments were $2.7 billion at Mar 31, 2017 and $2.8 billion at year-end 2016.
Year to date, the company has repurchased 2.3 million shares of common stock for approximately $340 million.
2017 Guidance
Cigna pulled up its 2017 earnings guidance after strong first-quarter results. It expects adjusted income from operations the range of $2.41 billion to $2.53 billion, or $9.25 to $9.75 per share, up from the previous estimate of $9.00–$9.50.
It expects revenues to grow 3% to 4% from the previous growth range of 2% to 3%. The company expects global medical customer growth in the range of 0.5 million to 0.6 million, up from the earlier range of 0.3 million to 0.5 million.
Cigna also anticipates adjusted income from operations for Global Health Care in the band of $2.065–$2.135 billion ($2.03–$2.11 billion). Global Supplemental Benefits remains unchanged at $295–$315 million and Group Disability and Life is expected at $230–260 million (previously $200–$230 million). For the Corporate and Other segment, the company retained its earlier expectation of an adjusted loss from operations of $180 million.
Cigna Corporation Price, Consensus and EPS Surprise
Cigna Corporation Price, Consensus and EPS Surprise | Cigna Corporation Quote
Zacks Rank and Performance of Other Insurers
Currently, Cigna carries a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here..
Among the other firms in the health care sector that have reported their first-quarter earnings so far, the bottom line at Aetna Inc. , Humana Inc. (HUM - Free Report) and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>