CIGNA AND THE RESTATEMENT OF PROFIT ESTIMATES
1. FiscalFourth Quarter Results: Cigna $CI-1.9% presented surprisingly strong results, with sales of $51.1 billion and earnings per share of $6.79, beating estimates.
2. Lower medical loss ratio (MLR): Cigna $CI-1.9%'s MLR (an important calculation that measures the percentage of premiums paid to cover medical expenses) came in at 82.2%, below analysts' estimates, in contrast to competitor Humana's MLR of 91.4%.
3. Cigna's stock rose while its competitors fell: Cigna' s$CI-1.9% for 2023 rose 2.6%, while Humana's stock fell 17.9% and UnitedHealth's fell 3.7%.
4. Market outlook and reaction: Cigna $CI-1.9% provided an optimistic outlook for 2024, with expected revenues of $235 billion. The company's stock rose 2.8%.
5. HIGHLIGHTS: Shares of Cigna $CI-1.9% rose after beating earnings expectations and differentiating itself from other health insurers.
Cigna's earnings jump piqued interest after a sharp sell-off by rival insurance giants.
How might Cigna's strategic decision to avoid the Medicare Advantage business, combined with surprisingly strong fourth fiscal quarter results, affect the dynamics of the health insurance industry, and how will this shift play out in the years ahead?
