Cigna(US:CI)2025-05-02 15:07Revenue Growth - Pharmacy revenues increased by 16% to $48,633 million for the three months ended March 31, 2025, compared to $42,036 million in the same period last year[130]. - Total revenues rose by 14% to $65,502 million in Q1 2025, up from $57,255 million in Q1 2024[130]. - Evernorth Health Services revenues increased by 16% to $53,681 million, while Cigna Healthcare revenues rose by 9% to $14,482 million compared to the same period in 2024[1]. - Adjusted revenues for the three months ended March 31, 2025, increased by 16% to $53,681 million, compared to $46,226 million in the same period of 2024[178]. - Pharmacy Benefit Services adjusted revenues increased by 14% to $29,742 million, while Specialty and Care Services revenues grew by 19% to $23,939 million[179]. Net Income and Earnings Per Share - Net income for Q1 2025 was $1,409 million, a significant improvement from a net loss of $212 million in Q1 2024[130]. - Shareholders' net income per share for Q1 2025 was $4.85, compared to a loss of $0.97 per share in Q1 2024[132]. - Shareholders' net income increased by $1,600 million, primarily due to the absence of net investment losses recorded in 2024[3]. Customer Metrics - Medical customers decreased by 6% to 18,043 thousand in Q1 2025, down from 19,184 thousand in Q1 2024[130]. - Medical customers decreased by 6%, mainly due to the HCSC transaction[5]. Operational Performance - Adjusted income from operations for Q1 2025 was $1,840 million, slightly down from $1,875 million in Q1 2024[131]. - The pre-tax margin for the overall operations decreased by 20 basis points to 2.7% from 2.9%[178]. - Pre-tax adjusted income from operations rose by 5% to $1,434 million, up from $1,360 million year-over-year[178]. - The medical care ratio for the Cigna Healthcare segment increased by 230 basis points to 82.2%, reflecting higher medical costs[189]. - The SG&A expense ratio for the Cigna Healthcare segment improved by 110 basis points to 19.4% due to revenue growth outpacing volume-related expenses[189]. - Pre-tax adjusted loss from operations in the Corporate segment remained consistent at $(411) million compared to $(409) million in the prior year[198]. Tax and Costs - The consolidated effective tax rate for Q1 2025 was 14.5%, a significant decrease from 368.4% in Q1 2024[130]. - Integration and transaction-related costs amounted to $216 million in Q1 2025, compared to $37 million in Q1 2024[131]. Investment and Debt - Net investment income decreased by 18% to $238 million in Q1 2025, down from $290 million in Q1 2024[130]. - The debt-to-capitalization ratio was 43.1% as of March 31, 2025, down from 43.8% at the end of 2024[11]. - As of March 31, 2025, the carrying value of the debt securities portfolio decreased from $9.4 billion to $8.2 billion, primarily due to the HCSC transaction[203]. - 84% of the debt securities, amounting to $6.9 billion, were rated investment grade (Baa and above), while $1.3 billion were below investment grade[204]. - The commercial mortgage loan portfolio was valued at $1.3 billion, consisting of approximately 40 fixed-rate loans, with a significant portion of borrower cash invested ranging between 30% and 40%[206]. - Other long-term investments totaled $4.7 billion, including investments in securities limited partnerships and real estate limited partnerships, with no single partnership exceeding 3% of the portfolio[208]. - The unconsolidated subsidiary investments portfolio supporting a joint venture in China was approximately $16.2 billion, with 75% in debt securities[210]. - The majority of the bonds below investment grade were rated at the higher end of the non-investment grade spectrum, consistent with the company's investment strategy[204]. - The commercial mortgage loan portfolio has no exposure to regional shopping malls and less than 25% exposure to office properties[207]. - The company does not expect future declines in investment fair values to have a material unfavorable effect on its financial condition or liquidity[202]. Share Repurchase and Cash Flow - The company repurchased 5.0 million shares for approximately $1.5 billion during the three months ended March 31, 2025[10]. - Operating cash flows decreased to $1,920 million from $4,840 million in the same period last year, primarily due to timing of settlements[9]. Transaction and Acquisitions - The company completed the HCSC transaction on March 19, 2025, with a purchase price of $4.8 billion, receiving $4.2 billion in cash at closing[8]. - Unpaid claims and claim expenses liability decreased by 10% to $4,508 million, driven by the HCSC transaction[193]. - The company expects continued volatility in private equity and real estate fund performance as market valuations adjust[209]. - As of March 31, 2025, there was no material change in the company's risk exposure as reported in the 2024 Form 10-K[213].