We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cigna (CI) Up 2.5% Since Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Cigna Corporation (CI - Free Report) . Shares have added about 2.5% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cigna (CI - Free Report) Beats Earnings and Revenue Estimates in Q4
Cigna Corp. reported fourth-quarter 2016 operating net earnings of $1.87 per share, which surpassed the Zacks Consensus Estimate of $1.74. However, earnings remained flat year over year.
For 2016, the company reported adjusted operating net earnings per share of $8.10, down 6.5% year over year.
The company reported total operating revenue of $9.88 billion. The top line not only beat the Zacks Consensus Estimate of $9.59 billion but also grew 3.2% year over year. The upside was mainly driven by continued strong results in Cigna’s Commercial Healthcare and Global Supplemental Benefits businesses.
Total revenue in full-year 2016 amounted $39.7 billion, reflecting an increase of 5% from 2015. The upside was primarily driven by continued growth in Cigna's targeted customer segments.
Premiums of $7.6 billion increased 2.1% year over year, while mail order pharmacy revenues grew 10%.
The company had total medical customers of 15.2 million as of Dec 31, 2016.
Quarterly Review by Segment
Global Health Care segment: Premiums and fees from the segment increased 2% year over year to $6.86 billion. The improvement was driven by customer growth, specialty contributions, and rate actions in the company’s Commercial employer group. However, the upside was partially offset by reductions in Medicare Part D and Individual customers. Adjusted operating earnings were $406 million, up 3% year over year. After tax adjusted margin, however, remained flat at 5.2%.
Global Supplemental Benefits Segment: Premiums and fees from this segment climbed 8.5% year over year to $842 million on the back of continued business growth.
Adjusted operating income increased 16.7% year over year to $63 million. Post tax adjusted margin for this segment improved 50 basis points (bps) year over year to 7.2%. The upside was led by Cigna’s strategic investments to achieve long-term growth.
The Global Disability and Life segment: Premiums and fees also increased 3.7% year over year to $1.03 billion, primarily driven by consistent business growth across disability and life products.
Adjusted operating income dropped nearly 17% year over year to $69 million. After tax adjusted margin also declined 150 bps year over year to 6.1%.
Corporate and Other Operations: This segment reported adjusted loss from operations of $53 million
Financial Position
As of Dec 31, 2016, cash and marketable investments at the parent company were $2.8 billion, up 100% year over year. In 2016, Cigna repurchased 785,000 shares of common stock for approximately $110 million.
2017 Guidance
Cigna expects earnings per share in the range of $9.00–$9.50. It expects revenues to grow 2% to 3%. The company expects global medical customer growth in the range of 0.3 million to 0.5 million. Cigna also anticipates adjusted income from operations for Global Health Care in the band of $2.03–$2.11 billion, Global Supplemental Benefits in the range of $295–$315 million and Group Disability and Life in the range of $200–$230 million. For the Corporate and other segment, the company expects an adjusted loss from operations of $180 million.
How Have Estimates Been moving since then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
At this time, the Cigna stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
While estimates have been broadly trending upward for the stock magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cigna (CI) Up 2.5% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Cigna Corporation (CI - Free Report) . Shares have added about 2.5% in that time frame, underperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Cigna (CI - Free Report) Beats Earnings and Revenue Estimates in Q4
Cigna Corp. reported fourth-quarter 2016 operating net earnings of $1.87 per share, which surpassed the Zacks Consensus Estimate of $1.74. However, earnings remained flat year over year.
For 2016, the company reported adjusted operating net earnings per share of $8.10, down 6.5% year over year.
The company reported total operating revenue of $9.88 billion. The top line not only beat the Zacks Consensus Estimate of $9.59 billion but also grew 3.2% year over year. The upside was mainly driven by continued strong results in Cigna’s Commercial Healthcare and Global Supplemental Benefits businesses.
Total revenue in full-year 2016 amounted $39.7 billion, reflecting an increase of 5% from 2015. The upside was primarily driven by continued growth in Cigna's targeted customer segments.
Premiums of $7.6 billion increased 2.1% year over year, while mail order pharmacy revenues grew 10%.
The company had total medical customers of 15.2 million as of Dec 31, 2016.
Quarterly Review by Segment
Global Health Care segment: Premiums and fees from the segment increased 2% year over year to $6.86 billion. The improvement was driven by customer growth, specialty contributions, and rate actions in the company’s Commercial employer group. However, the upside was partially offset by reductions in Medicare Part D and Individual customers.
Adjusted operating earnings were $406 million, up 3% year over year. After tax adjusted margin, however, remained flat at 5.2%.
Global Supplemental Benefits Segment: Premiums and fees from this segment climbed 8.5% year over year to $842 million on the back of continued business growth.
Adjusted operating income increased 16.7% year over year to $63 million. Post tax adjusted margin for this segment improved 50 basis points (bps) year over year to 7.2%. The upside was led by Cigna’s strategic investments to achieve long-term growth.
The Global Disability and Life segment: Premiums and fees also increased 3.7% year over year to $1.03 billion, primarily driven by consistent business growth across disability and life products.
Adjusted operating income dropped nearly 17% year over year to $69 million. After tax adjusted margin also declined 150 bps year over year to 6.1%.
Corporate and Other Operations: This segment reported adjusted loss from operations of $53 million
Financial Position
As of Dec 31, 2016, cash and marketable investments at the parent company were $2.8 billion, up 100% year over year.
In 2016, Cigna repurchased 785,000 shares of common stock for approximately $110 million.
2017 Guidance
Cigna expects earnings per share in the range of $9.00–$9.50. It expects revenues to grow 2% to 3%. The company expects global medical customer growth in the range of 0.3 million to 0.5 million.
Cigna also anticipates adjusted income from operations for Global Health Care in the band of $2.03–$2.11 billion, Global Supplemental Benefits in the range of $295–$315 million and Group Disability and Life in the range of $200–$230 million. For the Corporate and other segment, the company expects an adjusted loss from operations of $180 million.
How Have Estimates Been moving since then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one upward revision for the current quarter.
Cigna Corporation Price and Consensus
Cigna Corporation Price and Consensus | Cigna Corporation Quote
VGM Scores
At this time, the Cigna stock has a nice Growth Score of 'B', though it is lagging a bit on the momentum front with a 'C'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'B'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for value and growth investors.
Outlook
While estimates have been broadly trending upward for the stock magnitude of these revisions is net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.