Nov 4 (Reuters) - Cigna Corp (CI.N) reported better-than-expected third-quarter profit on Thursday and modestly raised its full-year adjusted profit forecast, on the back of growth in its health services unit that includes the pharmacy benefits management business.
Cigna's health services unit, rebranded to Evernorth last September, has been driving growth amid volatile medical costs at its health insurance business due to the COVID-19 pandemic.
Evernorth's adjusted revenue for the quarter ended Sept. 30 rose 12.7% to $33.61 billion, from $29.83 billion a year earlier.
Excluding special items, Cigna's income from operations was $5.73 per share, above analysts' estimate of $5.23 per share, according to Refinitiv IBES data.
Cigna moderately raised its outlook for 2021 adjusted profit from operations to at least $20.35 per share, from its prior estimate of a minimum of $20.20 per share.
The outlook includes a negative impact from COVID-19, the company said, without specifying how much it would be per share. Cigna had in August forecast a hit of about $2.50 per share to its 2021 adjusted earnings. read more
The surge in COVID-19 infections due to the spread of Delta variant in July and August drove up hospital costs for health insurers, which were partly offset for Cigna's rivals UnitedHealth Group (UNH.N) and Anthem (ANTM.N) due to lower spending on delayed non-urgent procedures. read more
Cigna's medical care ratio (MCR), the amount spent on medical claims versus income from premiums, worsened to 84.4% in the third quarter, from 82.6% a year earlier, compared with an estimate of 83.93%, according to four analysts polled by Refinitiv.
Cigna's better-than-expected revenues and much better profit per share absorbed a higher-than-expected MCR, Jefferies analyst David Windley said.
The company now expects 2021 MCR to be between 84.0% and 84.5%, up from its prior forecast of 83.0% to 84.0%.
Cigna's shares were up about 2% at $222.4 in light premarket trading.
Reporting by Manojna Maddipatla and Amruta Khandekar in Bengaluru; Editing by Krishna Chandra Eluri