Dive Brief:
- Cigna has announced a quarterly profit that exceeded expectations thanks to the strong performance of its government plans as well as low medical costs from its employer plans, Reuters reports.
- However, the quarter left shareholders with lower net income ($426 million, or $1.64 per share) than Q4 2014 ($467 million, or $1.77 per share).
- Cigna notes Q4 2015 net income was impacted by a special item 1 charge of $28 million after-tax, or $0.11 per share, due to transaction costs involved in Cigna’s planned merger with Anthem.
Dive Insight:
Cigna's predictions for 2016 include profits of $8.85-$9.25 per share, which falls below analysts' average estimate of $9.30 per share, Reuters notes.
That forecast factors in the impact of CMS' recent suspension of Cigna from any further enrollment to its Medicare Advantage and Standalone Prescription Drug Plan Contracts, and its marketing of the plans to new customers due to "systematic failures."
Cigna is also looking toward its merger as a major factor later this year.
“The effective execution of our global strategy and our differentiated capabilities provide us with strong momentum as we begin 2016," said Cigna president and CEO David M. Cordani in a prepared statement. "Our pending combination with Anthem will further accelerate our strategy to improve quality, choice, and affordability in the marketplace.”