Cigna has raised its annual profit forecast after beating quarterly earnings estimates, citing growth in its pharmacy and specialty drug businesses.
The company earned $7.78 per share on an adjusted basis in the second quarter, surpassing analyst estimates of $7.60 per share. Total revenue for the second quarter rose 7% to $71.67 billion, compared to analyst projections of $70.34 billion.
Revenue increase for the Evernorth Health Services unit in the second quarter
Second-quarter adjusted revenue at the Evernorth Health Services unit, which includes pharmacy benefit management and specialty pharmacy, rose to $61.47 billion. Cigna stated that this growth was partly boosted by the increased use of specialty drugs for complex conditions, including cancer, rheumatoid arthritis, and multiple sclerosis.
Strategic shift in insurance coverage
Cigna is reducing its exposure to government-backed health insurance businesses, citing elevated medical costs. Following an exit from Medicare Advantage last year, the company announced it will stop offering plans under the Affordable Care Act at the end of 2026.
The company has shifted its focus toward its pharmacy benefits management unit and its core traditional employer-sponsored healthcare business.
Medical loss ratio and earnings outlook
Cigna's medical loss ratio for the second quarter stood at 84.5%, up from the 83.2% recorded in the same quarter last year. According to data compiled by LSEG, analysts had expected a medical loss ratio of 84.46%.
Cigna stated that the prior-year quarter benefited from higher risk-adjustment payments within its family and individual plans business.
Cigna raised its 2026 adjusted profit forecast by 10 cents to at least $30.45 per share. This figure sits above the average analyst estimate of $30.41 per share.
