Cigna beats quarterly estimates, provides muted outlook

Adds analyst comment in paragraph 7, company comment in paragraph 11 and 14

By Sneha S K and Sriparna Roy

Feb 5 (Reuters) - Cigna's CI.N fourth-quarter profit and revenue topped expectations, helped by strength in its health services unit, sending its shares up 3% in morning trading on Thursday.

The company, however, provided a softer 2026 forecast, with both profit and revenue trailing estimates.

Cigna, unlike many peers, no longer offers Medicare Advantage plans for seniors and people with disabilities, and has taken steps to shrink the Obamacare business. It instead relies more on its pharmacy benefits segment and employer-sponsored healthcare plans.

In October, the company warned that its plan to eliminate aftermarket discounts known as rebates would hurt profits over the next two years as some customers switch to a new model.

For the reported quarter, revenue at Evernorth's pharmacy benefit unit, rose 20% to $36.3 billion.

Pharmacy benefit managers help negotiate drug prices and coverage with manufacturers on behalf of employers and health plan clients.

"While Cigna continues to expect pressure on Evernorth in 2026 due to its new model implementation, the business appears to be on-track with its plan as we begin the new year," Oppenheimer analyst Michael Wiederhorn said.

Medical loss ratio, or the percentage of premiums spent on medical care, rose to 88% in the quarter, driven by individual and family plans business. Analysts expected a ratio of 87.34%, according to LSEG data.

Cigna sees 2026 adjusted profit per share to be at least $30.25, compared with estimates of $30.36 per share and revenue to be about $280 billion, below estimates of $283.86 billion.

It sees annual medical costs to be between 83.7% and 84.7%, and expects first-quarter medical care ratio to be below 81%.

"Our assumptions incorporate appropriate prudence given the continued elevated cost environment," Chief Financial Officer Ann Dennison said.

Quarterly adjusted profit per share of $8.08 surpassed estimates of $7.88.

On Wednesday, the company settled the U.S. Federal Trade Commission's insulin case and agreed to changes aimed at lowering costs for patients, insurers and small pharmacies.

Cigna said the agreement will not impact its 2027 forecast.

(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Anil D'Silva)

((Sneha.SK@thomsonreuters.com;))