Will Declining Medical Customers Affect Cigna's Q1 Earnings?

Core Viewpoint - The Cigna Group is expected to report first-quarter 2025 results on May 2, 2025, with earnings estimated at $6.39 per share and revenues of $60.8 billion, indicating a year-over-year revenue growth of 6.2% despite a slight decline in earnings [1][2]. Financial Performance - The first-quarter earnings estimate has decreased by 2 cents over the past 60 days, reflecting a year-over-year decline of 1.2% [1]. - For the full year 2025, the revenue estimate is $252.36 billion, representing a 2.1% increase year over year, while the EPS estimate is $29.61, indicating an 8.3% growth [2]. Earnings Prediction - The current model does not predict a definitive earnings beat for Cigna, with an Earnings ESP of -0.34% and a Zacks Rank of 3 (Hold) [3]. Revenue Drivers - Cigna's revenues are anticipated to benefit from strong pharmacy revenues, particularly from the specialty pharmacy business within the Evernorth segment, with an expected 8.4% improvement in pharmacy revenues year over year [5]. - The Evernorth Health Services segment is projected to generate revenues of $50.5 billion, indicating a 9.3% growth from the prior year [6]. Challenges - The consensus estimate for premiums indicates an 8.6% decrease year over year, and Cigna Healthcare revenues are expected to decline by 8.5% [7]. - The total medical customers are projected to decrease to 18.3 million from 19.2 million a year ago [7]. - A decline in net investment income is expected, with an 11.9% year-over-year decrease anticipated [7]. - Elevated medical costs due to higher utilization trends and unit cost inflation are likely to impact margins, with the medical care ratio (MCR) expected to rise to 82.39% from 79.9% a year ago [8].