Cigna Group saw its shares surge after the announcement of the company’s profit outlook for the year ahead, Bloomberg reported. The company noted lower care costs boosted its fourth-quarter results, surpassing analyst expectations.
The company expects 2024 adjusted profit of at least $28.25 per share, marking a 25-cent increase from its previous projection. In the fourth quarter of 2023, the company reported adjusted income from operations of $6.79 per share, surpassing the analyst estimate of $6.53. Cigna’s revenue outperformed expectations, as highlighted in its statement issued last week.
Ahead of the opening bell in US markets, Cigna’s shares had increased by as much as 5.8%. According to Bloomberg, the results excluded charges related to a loss incurred from the sale of its Medicare business and expenses associated with an organizational efficiency plan.
Cigna’s medical-loss ratio, a metric gauging the portion of premium revenue allocated towards healthcare expenses, stood at 82.2% in the fourth quarter, surpassing analyst predictions of 83.8%. The favorable outcome was attributed partly to strategic pricing adjustments, indicating that Cigna was able to raise premiums sufficiently to cover medical costs. The report said this development is likely to allay concerns among investors who have been wary of escalating care costs observed at Cigna’s competitors, such as UnitedHealth Group Inc. and Humana Inc.
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