Cigna raises forecast on tight cost control
(Reuters) - U.S. health insurer Cigna Corp beat analysts' estimates for quarterly profit and raised its full-year earnings forecast on Thursday, as it kept a tight lid on costs of the services provided under its health plans.
Cigna is looking to close its $52 billion acquisition of Express Scripts and hopes that the deal will lower client expenses and cushion the impact of increases in the cost of medical services.
In the third quarter, Cigna's commercial medical loss ratio - the amount it spends on medical claims compared to income from premiums in its biggest business - improved to 76.3 percent, from 78.6 percent a year earlier.
The consensus estimate was 77.4 percent, according to brokerage Evercore ISI.
Cigna, which mainly sells large and medium-sized corporate and international insurance, said the commercial business saw a 3 percent rise in membership to 15.8 million.
"Results were driven in part by commercial customer growth, expansion of specialty relationships and strong medical cost performance," said Cantor Fitzgerald analyst Steven Halper.
Cigna, which also provides government-backed Medicare plans, said it now expects full-year adjusted income from operations of $14.20 to $14.40 per share.
The company had earlier forecast adjusted income from operations to be in a range of $13.60 to $13.90 per share.
Net income for shareholders rose nearly 38 percent to $772 million, or $3.14 per share, in the third quarter ended Sept. 30.
Excluding items, Cigna earned $3.84 per share, above analysts' average estimate of $3.44, according to Refinitiv data.
Operating revenue rose 10.3 percent to $11.46 billion, beating estimate of $11.17 billion.
(Reporting by Manas Mishra and Tamara Mathias in Bengaluru; Editing by Shailesh Kuber and Sriraj Kalluvila)