Cigna Q3 Earnings Beat on Client Wins & Specialty Business Strength

Core Viewpoint - Cigna Group reported strong third-quarter 2024 results, with adjusted EPS of $7.51, exceeding estimates and showing a year-over-year improvement of 10.9% [1]. Financial Performance - Adjusted revenues reached $63.7 billion, a 29.8% increase year over year, driven by significant client wins in the Evernorth Health Services segment [1][2]. - Total benefits and expenses rose to $61.1 billion, a 31% increase year over year, primarily due to higher pharmacy and service costs [3]. - Adjusted income from operations grew 5% year over year to $2.1 billion, supported by Evernorth Health Services [4]. Segment Performance - Evernorth Health Services reported adjusted revenues of $52.6 billion, a 36% year-over-year increase, benefiting from organic growth and new client acquisitions [5]. - Cigna Healthcare's adjusted revenues were $13.2 billion, a 3% increase year over year, but fell short of estimates due to a decline in Individual and Family Plans customers [7][8]. Customer Metrics - Cigna's medical customer base decreased to 19 million, down 2.9% year over year, which was below the consensus estimate [2]. Financial Position - As of September 30, 2024, Cigna had cash and cash equivalents of $5.9 billion, a 24.7% decline from the end of 2023, while total assets increased to $157.6 billion [9]. - Long-term debt rose to $30.2 billion, a 7.4% increase from the end of 2023 [9]. Share Repurchase - From January 1, 2024, to September 30, 2024, Cigna repurchased 14.7 million shares for approximately $5 billion [11]. Outlook - Cigna reaffirmed its 2024 adjusted EPS estimate of at least $28.40, indicating a growth of at least 13.2% from 2023 [12]. - The company expects average annual adjusted EPS growth of 10-14% in the long term and projected operating cash flows of around $60 billion over the next five years [13].