April 30 (Reuters) – Cigna slightly raised its annual adjusted profit forecast on Thursday after beating first-quarter earnings estimates, helped by strength in its health services unit and as medical costs came in lower than expected.
Unlike many peers, Cigna no longer offers Medicare Advantage plans for seniors and people with disabilities and has taken steps to shrink the Obamacare business. It instead relies more on its pharmacy benefits segment and employer-sponsored healthcare plans.
The company is also shifting some customers to a new model that excludes after-market discounts, known as rebates, a move it says will squeeze margins over the next two years.
Quarterly medical loss ratio, or the percentage of premiums spent on medical care, stood at 79.8% in the quarter. Analysts expected a ratio of 81.56%, according to LSEG data.
The company said this reflected the impact of its deal with Health Care Service Corp to sell its Medicare business.
For the reported quarter, adjusted revenue at its health services unit Evernorth rose nearly 9% to $58.44 billion.
Cigna now sees 2026 adjusted profit per share to be $30.35, compared with its previous expectation of at least $30.25 per share and analysts’ estimate of $30.33 per share.
On an adjusted basis, the company earned quarterly profit of $7.79 per share, surpassing analysts’ estimate of $7.61 per share.
(Reporting by Sriparna Roy and Sneha S K in Bengaluru; Editing by Pooja Desai)
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