Cigna beats estimates for Q3 earnings, full-year outlook

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In the third quarter, Cigna’s total revenues also grew 5% year over year to $10.4 billion.

Cigna reported better-than-expected earnings for the third quarter of 2017 and raised its full-year outlook despite the volatility that is facing the health insurance sector at large.

The insurer’s net income was $560 million, or $2.21 per share, compared to $456 million, or $1.76 per share, in Q3 2016. Its adjusted income from operations was $716 million in the quarter, or $2.83 per share, beating the consensus estimate of $2.35 per share.

Driving those results, Cigna said, was significantly increased earnings contributions from each of its business segments—global healthcare, global supplemental benefits and group disability and life.

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Cigna’s total revenues also grew 5% year over year to $10.4 billion. For full-year 2017, the company now expects its adjusted income from operations to be $2.60 billion to $2.65 billion in 2017, or $10.20 to $10.40 per share. That’s up from the $9.75-10.05 per share it estimated previously, and higher than the $10.03 consensus estimate.

RELATED: Decline in medical costs drives Cigna's strong Q2

During a call with investors Thursday, CEO David Cordani stressed that the insurer was well-positioned to weather the uncertainty that has gripped the industry amid repeated attempts to repeal or undermine the Affordable Care Act.

“In a disruptive environment, Cigna’s strategy of go deeper, go local and go beyond serves as our guide to value creation in each of our targeted growth platforms,” he said.  

To that end, the insurer is particularly focused on differentiating itself in the commercial employer benefits sector, where its wellness offerings and collaborative relationships with providers make it an attractive partner for clients.

“We see outstanding opportunities for continued growth” in that business, Cordani added.

As for Cigna’s individual market business, Executive Vice President and CFO Eric Palmer noted that the company expects its 2017 results to be slightly profitable.

The CEOs of two of Cigna’s larger competitors, UnitedHealth and Aetna, said on their recent earnings calls that President Donald Trump’s recent executive order might open up new opportunities for them if it results in the expanded sale of short-term policies and association health plans.

For his part, Cordani noted that Cigna does have a past track record relative to supplemental and alternative benefits, but suggested that the company would wait and see what regulations result from the executive order before deciding whether to alter its product portfolio.

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