A month has gone by since the last earnings report for Cigna (CI - Free Report) . Shares have added about 3.3% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Cigna due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Cigna Q3 Earnings & Revenues Beat, Guidance Up
Cigna Corp. came up with adjusted earnings per share of $3.84 in third-quarter 2018, beating the Zacks Consensus Estimate by 11.3%. The same was up 36% year over year. Strong performance across the company’s Global Health Care, Global Supplemental Benefits and Group Disability and Life businesses aided earnings.
Cigna posted revenues of $11.44 billion, surpassing the Zacks Consensus Estimate by 2%. Revenues grew 9% year over year led by strong business growth in Cigna's Global Healthcare and Global Supplemental Benefits segments.
Premiums were up 11% year over year to $9 billion, while fees increased 8.5% to $1.35 billion.
The company’s medical enrollment grew by 34,000 lives to 16.27 million customers driven by growth in Select, Individual and Middle Market segments.
Strong Segment Performance
Global Health Care: Operating revenues of $9.11 billion were up 11.5% year over year driven by Commercial customer growth and expansion of specialty relationships, as well as premium increases consistent with the underlying cost trends.
Adjusted operating earnings were $804 million, up 40% year over year was due to medical and specialty business growth, strong medical cost performance, a lower tax rate and favorable prior year reserve development.
Global Supplemental Benefits: Operating revenues of $1.09 billion were up 11% year over year, reflecting continued business growth in the company’s targeted markets.
Adjusted operating income decreased 14.7% year over year to $93 million, reflecting business growth and gains from expense management, which was more than offset by unfavorable claims experience.
Global Disability and Life: Operating revenues of $1.12 billion were up 2% year over year from solid disability performance and favorable life results.
Adjusted operating income increased 37% year over year to $100 million.
2018 Guidance Raised
For 2018, the company expects to earn in the range of $14.20 and $14.40 on a per share basis, (up 50 to 60 cents from the previous outlook range). Total revenue growth is expected to grow in the range of approximately 8.5% compared with the previous growth range of 8% and medical customers are projected to grow by 0.4 million to 0.5 million lives, (unchanged from the previous forecast).
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
Currently, Cigna has a subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Cigna has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.