The Cigna Group (CI) Q3 2024 earnings summary

Executive summary

• Total revenues for Q3 2024 rose 30% year-over-year to $63.7 billion, driven by strong growth in Evernorth Health Services and higher pharmacy revenues.

• Adjusted EPS for Q3 2024 was $7.51, up 11% year-over-year, with adjusted income from operations up 5% to $2.1 billion.

• Evernorth Health Services and Cigna Healthcare both contributed to growth, with Evernorth leading through specialty and care services, and Cigna Healthcare maintaining solid performance despite elevated specialty medication trends.

• Shareholders' net income for Q3 2024 was $739 million, down 48% from Q3 2023, mainly due to a $2.7 billion impairment of VillageMD equity securities.

• Customer relationships reached 183.5 million, up 12% from year-end 2023, with pharmacy customers up 22%.

Financial highlights

• Q3 2024 revenues: $63.7B (+30% YoY); adjusted EPS: $7.51 (+11% YoY); adjusted income from operations: $2.1B (+5% YoY).

• Evernorth Health Services adjusted revenues rose 36% year-over-year to $52.6B, with pre-tax adjusted income up 9% to $1.88B.

• Specialty and Care Services revenue rose 23% year-over-year to $23.8B, with adjusted earnings of $825 million.

• Cigna Healthcare adjusted revenues increased 3% to $13.2B, but pre-tax adjusted income declined 4% to $1.17B; medical care ratio was 82.8%.

• Year-to-date share repurchases totaled $5.7 billion, with $715 million repurchased in October and $5.6 billion remaining repurchase authority.

Outlook and guidance

• Reaffirmed full-year 2024 adjusted EPS guidance of at least $28.40, with Evernorth pre-tax adjusted income of at least $7B and Cigna Healthcare at least $4.78B.

• 2025 EPS growth expected to be at least 10%, supported by biosimilar adoption, new client relationships, and share repurchase from Medicare business sale proceeds.

• Cigna Healthcare medical care ratio expected between 81.7% and 82.5% for FY2024.

• Long-term average annual adjusted EPS growth target remains 10%-14%.

• The sale of Medicare Advantage and related businesses for $3.7B is expected to close in Q1 2025, with proceeds primarily allocated to share repurchases.