© Reuters. Signage for Cigna is pictured at a health facility in Queens, New York City, U.S., November 30, 2021. REUTERS/Andrew Kelly
(Reuters) -Cigna Corp reported better-than-expected first-quarter profit on Friday, helped by growth in its health services unit that includes the pharmacy benefits management business, and modestly raised its full-year adjusted profit forecast.
Health insurers have been pressured due to volatile medical costs during the pandemic, some of which was offset with people postponing non-urgent medical procedures.
Evernorth, Cigna (NYSE:)’s health services unit which has helped drive growth lately, reported adjusted revenue of $33.59 billion in the quarter ended March 31 compared with $30.62 billion a year earlier.
Cigna moderately raised its forecast for 2022 adjusted profit from operations to at least $22.60 per share, from its prior estimate of a minimum of $22.40 per share.
Larger rivals UnitedHealth Group (NYSE:) and Anthem also raised their 2022 adjusted profit view last month, with industry bellwether UnitedHealth signalling that although demand for deferred procedures was approaching normal levels, it had not increased as feared, leading to lower claims and costs.
Cigna’s medical care ratio (MCR), the amount spent on medical claims versus income from premiums, worsened to 81.5% in the reported quarter, from 80.9% a year earlier, partly due to higher medical costs.
But, Cigna, which manages insurance plans for big companies and sells health plans on government exchanges, said total medical customers in its health plans rose to 17.8 million in the quarter on a year-over-year basis.
Stephens analyst Scott Fidel says following 2021 where Cigna stock was weighed down by medical cost pressures, the company has turned the page in 2022 with medical care ratio and enrolment being better than expected.
Excluding special items, Cigna’s income from operations was $6.01 per share, above analysts’ average estimate of $5.18, according to Refinitiv IBES data.
Cigna’s shares were up 0.6% at $253.57 in light premarket trading.