July 30 (Reuters) - Cigna on Thursday raised its annual profit forecast, after beating quarterly earnings estimates on growth in its pharmacy and specialty drug businesses.
The company has been reducing its exposure to government-backed health insurance businesses due to elevated medical costs, exiting Medicare Advantage last year and announcing it will stop offering plans under the Affordable Care Act, or Obamacare, at the end of 2026.
Instead, it has shifted focus toward its core traditional employer-sponsored
healthcare business and its pharmacy benefits management unit.
Second-quarter adjusted revenue at its Evernorth Health Services unit - which includes the pharmacy benefit management unit and specialty pharmacy - rose 6% to $61.47 billion.
Growth in the segment was partly boosted by higher use of specialty drugs for complex conditions such as cancer, multiple sclerosis and rheumatoid arthritis, the company said.
Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients.
The company's medical loss ratio, or the percentage of premiums spent on medical care, stood at 84.5% for the quarter, higher than 83.2% last year. Analysts were expecting a medical loss ratio of 84.46%, according to data compiled by LSEG.
The prior-year quarter had benefited from higher risk-adjustment payments in its individual and family plans business, Cigna said. Those payments compensate insurers that cover a disproportionate share of sicker members.
The company raised its 2026 adjusted profit forecast by 10 cents to at least $30.45 per share. Analysts, on average, estimate the company's annual earnings at $30.41 per share.
On an adjusted basis, the company earned $7.78 per share in the second quarter, beating estimates of $7.60 per share.
Total revenue for the quarter rose 7% to $71.67 billion, compared with analysts' estimates of $70.34 billion.
(Reporting by Kunal Das and Sneha S K in Bengaluru; Editing by Leroy Leo)
