February 1, 2019

Cigna’s 4Q profits fall 45% amid Express Scripts purchase

HBJ File Photo
HBJ File Photo
Cigna headquarters in Bloomfield.

Despite an overall revenue surge, Bloomfield health insurer Cigna on Friday posted a 45.8 percent drop in fourth-quarter profits in part because it incurred large expenses tied to its recent $67 billion acquisition of pharmacy-benefits manager Express Scripts.

For the quarter ended Dec. 31, Cigna reported net income of $144 million, or 55 cents a diluted share, compared to $266 million, or $1.07 a diluted share, in the year-ago period.

Net sales rose 34.5 percent during the quarter from $10.6 billion in 2017 to $14.3 billion in 2018. The higher revenues were squandered by higher interest expenses following Cigna's Dec. 20 acquisition of Express Scripts, the nation's largest pharmacy-benefit management company based in St. Louis, Mo.

For the year, Cigna reported a profit of $2.6 billion, or $10.54 a diluted share, and total revenue of $48.1 billion.

The insurer this year expects full-year earnings in the range of $16 to $16.50 a diluted share and revenues of $131.5 billion to $133.5 billion.

Under the Cigna-Express Scripts combination, several key executives from the Bloomfield company will maintain their current roles. That includes: CEO and President David Cordani; Chief Financial Officer Eric Palmer; Chief Marketing Officer Lisa Bacus; and Matthew Manders, president of strategy and solutions.

Express Scripts President and CEO Tim Wentworth will oversee the combined company's health services business as president.

It's not exactly clear how the insurer's roughly 4,400 Connecticut employees will be impacted by the industry-shifting acquisition.

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