How Health Insurer CIGNA Corporation (CI) Crushed Earnings Estimates
CIGNA Corporation (NYSE:CI) shareholders had hardly anything to complain about with company shares up more than 30% for the year. And now they have another good reason to remain invested as CI smashed the lights out with its second quarter earnings report — EPS came in at $2.91, well above the expected $2.48 and a year-ago quarter’s $1.98, while revenue jumped 4% to $10.3 billion. “Our strong second quarter results and significant growth across our diversified portfolio of businesses demonstrate the focused execution of our strategy,” said CEO David Cordani. The company’s medical customer base increased by 457k to 15.7 million, during the quarter. The customer growth in its commercial business triggered a premium and fee collection growth of 3% in the global healthcare division, which accounts for the lion’s share of its income. However, enrollment reductions in the government business partially offset this growth. Indicating effective cost management at current levels, medical care ratio (MCR), which weighs medical costs borne against premiums, for the commercial business stood at 78.7% and government MCR was 86.1%, almost unchanged from a year-ago quarter’s 78.7% and 86.4%, respectively.