Cigna beats profit estimates on lower-than-expected costs, pharmacy benefit boost
Aug 1 (Reuters) -Cigna CI.N reported a second-quarter profit on Thursday that beat Wall Street estimates, helped by lower-than-expected medical costs and strength in its pharmacy benefit management unit.
The industry has been contending with elevated medical costs since late last year, as older adults catch up on delayed procedures, and lower-than-expected payments from the government for managing healthcare for people aged 65 and older or with disabilities, under the Medicare plans.
Compared to UnitedHealth UNH.N and Humana HUM.N, Cigna has a much smaller presence in the Medicare Advantage (MA) market and is in the process of selling its MA business to Health Care Service Corp.
Cigna relies more on managing employer-sponsored healthcare plans.
While the company saw its medical care ratio - the percentage of premiums spent on medical care - rise to 82.3% from 81.2% a year earlier, it was lower than analysts expectations of 82.43%, according to LSEG estimates.
Cigna maintained its annual profit forecast of at least $28.40 per share, and said it continues to expect a medical care ratio between 81.7% and 82.5% for the year.
For 2024, analysts expect a profit of $28.51 per share and a medical care ratio of 82.08%.
Adjusted sales in Cigna's Evernorth unit, under which it operates pharmacy benefit management (PBM) business, jumped nearly 30% to $49.55 billion, for the quarter ended June 30.
The company reported an adjusted profit of $6.72 per share, compared with analysts' average estimate of $6.41.
Reporting by Sriparna Roy in Bengaluru and Amina Niasse in New York City; Editing by Shinjini Ganguli
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