Cigna Q1 Earnings Beat Estimates on Evernorth Health Strength

The Cigna Group CI reported first-quarter 2025 adjusted earnings per share (EPS) of $6.74, which outpaced the Zacks Consensus Estimate by 5.5%. Also, the bottom line increased 4.2% year over year. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

Adjusted revenues improved year over year to $65.5 billion from $57.2 billion. The top line beat the consensus mark by 7.7%.

The strong first-quarter results benefited from the rising relationship with existing clients and solid growth in Evernorth Health Services, partly offset by increasing total benefits and expenses, primarily in pharmacy and other services costs.

Cigna Group Price, Consensus and EPS Surprise

Cigna Group price-consensus-eps-surprise-chart | Cigna Group Quote

CI’s Q1 Performance

Cigna’s medical customer base was 18 million as of March 31, 2025, which slipped 6% year over year and lagged the Zacks Consensus Estimate of 18.3 million. The metric was affected due to the divestiture of medicare businesses to HCSC.

Total benefits and expenses escalated 16% year over year to $63.5 billion due to higher pharmacy and other service costs, as well as medical costs and other benefit expenses. The adjusted SG&A expense ratio of 5.8% improved 60 basis points (bps) year over year, resulting from a business mix shift and continued operational efficiencies.

Adjusted income from operations fell 2% year over year to $1.8 billion.

Cigna’s Segmental Update

Evernorth Health Services: The unit’s adjusted revenues climbed 16% year over year to $53.7 billion, higher than the Zacks Consensus Estimate of $50.1 billion. The metric benefited from volume growth in Specialty and Care Services, and new businesses in the Pharmacy Services business lines.  

Adjusted operating income, on a pre-tax basis, was $1.4 billion, which advanced 5% year over year and was in line with the consensus mark of $1.4 billion. The metric gained from consistent affordability improvements and organic growth in specialty businesses. However, the adjusted pre-tax margin deteriorated 20 bps year over year to 2.7%. 

Cigna Healthcare: The segment recorded total revenues of $14.5 billion, which grew 9% year over year and also surpassed the Zacks Consensus Estimate of $12.2 billion. The metric gained as a result of premium rate hikes. 

Pre-tax adjusted operating income fell 4% year over year to $1.3 billion. However, it was higher than the consensus mark of $1.2 billion. The metric was impacted due to a deteriorating medical care ratio (MCR). 

MCR was 82.2%, which deteriorated 230 bps year over year at the first-quarter end due to elevated stop-loss medical costs.

Cigna’s Financial Position (As of March 31, 2025)

Cigna exited the first quarter with cash and cash equivalents of $8.3 billion, which increased from the 2024-end level of $7.6 billion. Total assets of $150.7 billion decreased from the 2024-end figure of $155.9 billion.

Long-term debt amounted to $26.5 billion, down from $28.9 billion as of Dec. 31, 2024. Short-term debt totaled $4 billion.

Total equity of $40.4 billion decreased from $41.2 billion as of the 2024-end level.

Cigna generated operating cash flows of $1.9 billion in 1Q 2025, which fell 60.3% from the 1Q 2024 figure.

Cigna’s Capital Deployment Update

Cigna bought back shares worth around $1.5 billion in the first quarter of 2025. Year to date, till May 1, it repurchased a total of 8.2 million shares for $2.6 billion.

Cigna’s 2025 Outlook Improved

Adjusted EPS is now estimated to be a minimum of $29.60, up from previous guidance of $29.50, which indicates growth of at least 8.3% from the 2024 figure of $27.33.

MCR is still projected in the band of 83.2-84.2%.

Adjusted operating income, on a pre-tax basis, for the Evernorth Health Services segment is anticipated to be a minimum of $7.2 billion. Meanwhile, the metric for the Cigna Healthcare unit is forecasted to be a minimum of $4.125 billion. 

Adjusted revenues were earlier forecasted at a minimum of $252 billion, which indicates an improvement of at least 2% from the 2024 figure of $247.1 billion.

Adjusted operating income was earlier anticipated to be a minimum of $7.9 billion, which indicates growth of at least 2.1% from the 2024 figure of $7.7 billion. Operating cash flow was forecasted at around $10 billion. Capital expenditures were earlier expected to be around $1.4 billion.

Cigna earlier expected total medical customers to be roughly 18.1 million.

The adjusted SG&A expense ratio was earlier estimated at around 5.4%.

CI’s Zacks Rank & Key Picks

CI currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader medical space are Aveanna Healthcare Holdings Inc. AVAH, ANI Pharmaceuticals Inc. ANIP and Centene Corporation CNC, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Aveanna Healthcare’s current-year earnings of 12 cents per share has witnessed six upward revisions in the past 60 days against none in the opposite direction. The consensus estimate for current-year revenues is pegged at $2.1 billion, implying 4.6% year-over-year growth.

The Zacks Consensus Estimate for ANI Pharmaceuticals’ current-year earnings is pegged at $6.36 per share. ANI Pharmaceuticals beat earnings estimates in each of the trailing four quarters, with the average surprise being 17.3%. The consensus estimate for current-year revenues is pegged at $769.2 million, implying 25.2% year-over-year growth.

The Zacks Consensus Estimate for Centene’s current-year earnings of $7.28 per share has witnessed two upward revisions in the past 30 days against no movement in the opposite direction. Centene beat earnings estimates in three of the trailing four quarters and missed once, with the average surprise being 25.5%. The consensus estimate for current-year revenues is pegged at $178.7 billion, calling for 9.6% year-over-year growth.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research