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A month has gone by since the last earnings report for Cigna (CI). Shares have added about 12.3% 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 Q4 Earnings Miss, Decline Y/Y on Elevated Claims
Cigna’s fourth-quarter 2020 earnings of $3.51 per share missed the Zacks Consensus Estimate by 4.1% and also declined 18.6% year over year. Results suffered escalated COVID-related costs
Cigna’s revenues of $41.7 billion beat the Zacks Consensus Estimate by 4.3% and also grew 14.2% year over year, driven by a higher contribution from its businesses, led by the Evernorth segment.
The company saw a decline of 472000 customers from the prior-year quarter in its medical enrollment to 16.673 million, attributable to lower commercial members.
Selling, general and administrative expense ratio was 8.5, which improved 80 basis points year over year on significant growth in revenues and cost-control measures.
Strong Segmental Performances
Evernorth Health Services: Adjusted revenues of $30.5 billion were up 19.4% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth including a rise in retail network and specialty pharmacy services.
Operating income of $1.59 billion increased 3.4% year over year, reflecting customer growth, expanded adjusted pharmacy scripts volumes, benefits of effective management of the supply chain and a continued strong performance in specialty pharmacy services, partially offset by higher operating expenses to support growth.
During the quarter, Evernorth fulfilled 388 million adjusted pharmacy, up 19% year over year, driven by the insourcing of U.S. Medical pharmacy volumes and strong organic growth.
U.S. Medical: Earlier called Integrated medical, this segment was renamed in the fourth quarter and reported adjusted revenues of $9.73 billion, up 6% year over year, highlighting customer wins in Medicare Advantage as well as in the Select segment besides premium growth.
Operating income of $328 million declined 54% year over year due to the return of medical utilization to more typical levels and direct COVID-19 costs apart from the expenses involving strategic actions taken by the company to support customers and providers.
International Markets: Adjusted revenues of $1.54 billion were up 7.3% year over year, reflecting consistent business growth.