Shares of The Cigna Group (NYSE:CI) traded higher in the premarket on Friday after the managed care firm raised its full-year earnings outlook following a consensus-beating Q1 2025 report, which indicated better-than-expected medical cost trends.
During the quarter, the company’s top line grew ~14% YoY to $65.5B, beating the Street forecasts by as much as $5.1B, as its Cigna Healthcare division, which houses its health insurance business, expanded ~9% YoY in adjusted terms, generating $14.5B in revenue.
Meanwhile, Evernorth Health Services division, which operates CI’s pharmacy benefit manager Express Scripts, added $53.7B in adjusted revenue with ~16% YoY growth driven by ~14% YoY and ~19% YoY growth in its Pharmacy Benefit Services and Specialty & Care Services, respectively.
As for the medical care ratio, an industry benchmark indicating the portion of premium revenue spent on medical care, Cigna (NYSE:CI) recorded 82.2% for its healthcare division, falling short of the 82.4% projected by analysts, according to Bloomberg data.
While CI’s MCR for Q1 indicated a rise from 79.9% in the prior year period mainly due to the anticipated higher stop-loss medical costs, the company’s adj. income from operations rose ~4% YoY to $6.74 per share, exceeding the analysts’ estimates by $0.39.
Looking ahead, Cigna (NYSE:CI) reaffirmed its full-year outlook for the medical care ratio at 83.2% - 84.2% but raised the guidance for adj. income from operations by $0.10 per share to at least $29.60 in line with the consensus.
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