Health insurer Cigna Corp beat quarterly profit estimates on Thursday, helped by lower medical costs from delayed surgeries and robust sales in its unit that includes the Express Scripts pharmacy benefits business.
As Americans delayed non-essential surgeries and avoided hospital visits during nationwide shelter-in-place restrictions due to the COVID-19 pandemic, healthcare spending costs declined, benefiting health insurers.
Rivals UnitedHealth Group Inc and Anthem Inc earlier this month warned of higher medical costs in the second half of the year as people begin to catch up on delayed procedures. Like its rivals, Cigna also reaffirmed its previously given financial targets for the year.
Cigna’s medical care ratio, which compares expenses for medical claims with income from premiums, improved significantly to 70.5% in the second quarter, from 81.6% a year earlier.
The company continues to see full-year sales of $154 billion to $156 billion and adjusted profit from operations between $18 and $18.60 per share.
Sales in its health services segment, which includes Express Scripts, rose nearly 22% to $28.6 billion in the reported quarter from a year earlier. The growth was driven by a 24% jump in adjusted pharmacy script volumes.
Excluding items, the company reported a profit of $5.81 per share in the quarter ended June 30, beating estimates of $5.15 per share, according to Refinitiv IBES data.
Net income rose to $1.75 billion, or $4.73 per share, from $1.41 billion, or $3.70 per share.
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Adjusted revenues grew to $39.21 billion, topping estimates of $37.75 billion.
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