UPDATED: 11:40 a.m. ET on Oct. 31
Cigna's stock trended up on Thursday morning while Humana's took a downturn based on commentary from Cigna's top brass on its earnings call.
CEO David Cordani told investors that the insurer intends to invest some of its free cash flow in stock buybacks, which analysts said likely signals that an acquisition of Humana isn't on the horizon, even as Bloomberg reported last week that talks between the two companies were back on.
Seeking Alpha said the comments may "dampen" speculation of a takeover, while Scott Fidel, an analyst for Stephens, wrote in a research note that the buybacks signal it's "very unlikely" that Cigna will pursue a deal in the Medicare Advantage space anytime soon.
Cigna's shares were up by nearly 5% at about noon ET, while Humana's were down by 1.5%. Cordani did not comment on the deal directly during the earnings call.
The Cigna Group reported $739 million in profit for the third quarter, a figure that accounts for a $1 billion after-tax investment loss tied to VillageMD.
Revenue for the third quarter was $63.7 billion, according to the company's earnings report released Thursday. By comparison, Cigna posted $49 billion in revenue and $1.4 billion in profit in the prior-year quarter.
Both numbers surpassed Wall Street analysts' predictions, according to Zacks Investment Research.
Through the first nine months of the year, Cigna has earned $181.5 billion in revenue and $2 billion in profit. Revenues across the first three quarters of 2023 were $144.2 billion, while profit was more than double at $4.1 billion, according to the report.
"Our strong performance this quarter is a testament to the leadership, stability and expertise of our team," said David Cordani, chairman and CEO of the Cigna Group. "Our disciplined execution of our strategic plan and our comprehensive health services ensure we remain well-positioned in a highly dynamic environment, while sustaining business growth in both the near- and long-term."
Medical membership was down slightly year over year, according to the report, dipping to 19 million. Pharmacy benefit customers, meanwhile, grew to just shy of 120 million, reflecting the addition of Centene's book of business earlier this year.
At Evernorth, revenue was $52.6 billion, up from $38.6 billion in the prior-year quarter. This includes 50% revenue growth for the PBM that was driven by key client wins and "organic growth," Cigna said.
Revenues were also up by 23% at its specialty and care services unit, according to the report.
Revenue at Cigna Healthcare, the company's health insurance arm, was $13.2 billion in the third quarter, the report said. Cigna's medical loss ratio for the quarter was 82.8%, up from 80.5% in the third quarter of 2023, reflecting the industrywide trend toward elevated utilization.
Cigna expects earnings per share of at least $28.40 for the year and for its full-year MLR to be between 81.7% and 82.5%.