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Cigna Q4 Earnings Top on Higher Enrollment, 2018 View Issued

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Cigna Corp. (CI - Free Report) came up with adjusted earnings per share of $1.94 for the fourth quarter, beating the Zacks Consensus Estimate of $1.87. Earnings also grew 3.7% year over year.

Better-than-expected earnings were primarily driven by strong contribution from its Global Supplemental Benefits segment.

Other Details

Cigna posted revenues of $10.53 billion, which surpassed the Zacks Consensus Estimate of $10.29 billion. Revenues grew 5.9% year over year.

Premiums were up 7% year over year to $8.2 billion, while fees increased 5% to $1.19 billion.

Total benefits and expenses of $9.78 billion increased 5% year over year, led by higher global health care medical cost.

The company’s medical enrollment grew to 15.91 million from 15.19 million in the year-ago quarter, driven by growth in its Commercial Mrket segment.

Cigna Corporation Price, Consensus and EPS Surprise

Strong Segment Performance

Global Health Care: Operating revenues of $8.3 billion were up 6% year over year on a 6.8% year-over-year increase in premiums and fees to $7.3 billion. The improvement was driven by customer growth in the Commercial Market segment. However, the upside was partially offset by reductions in Government customers.

Adjusted operating earnings were $397 million, down 2% year over year due to higher medical costs.

Global Supplemental Benefits: Operating revenues of $1.02 billion were up 17% year over year on a 17.2% increase in premiums and fees, reflecting continued business growth.

Adjusted operating income increased 28.5% year over year to $81 million, reflecting business growth and favorable claims experience, particularly in South Korea.

Global Disability and Life: Operating revenues of $1.1 billion were down 1% year over year due to a 1.4% decrease in premiums and fees.

Adjusted operating income declined 11.6% year over year to $61 million.

Financial Position

Cigna’s cash and marketable investments were of $1.2 billion as of Dec 31, 2017, down from $2.8 billion as of Dec 31, 2016.

Long-term debt was $5.2 billion as of Dec 31, 2017, reflecting a 9.3% increase year over year.

2018 Guidance

The company expects to earn in the range of $12.40 and $12.90, on a per share basis. Total revenue growth is projected in the range of 7% to 8% and medical customers are projected to grow by 0.3 million to 0.5 million lives.

The consolidated adjusted tax rate should fall in the range of 22.5% to 23.5%.

Zacks Rank and Other Releases

Cigna carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Other health insurers UnitedHealth Group Inc. (UNH - Free Report) , Anthem Inc. (ANTM - Free Report) and Aetna Inc. (AET - Free Report) beat estimates in the fourth quarter by 3.6%, 3.2% and 5.93%, respectively.

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