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January 30, 2025

Cigna stock falls after 4Q earnings miss forecasts; higher medical costs to blame

PHOTO | COSTAR Cigna headquarters in Bloomfield.

Bloomfield-based The Cigna Group saw its stock fall steeply Thursday morning after its fourth-quarter earnings fell well short of analysts’ expectations.

Citing high healthcare costs, Cigna reported adjusted income from operations for the three-month period that ended Dec. 31 of $1.85 billion, or $6.64 per share, down from $2 billion, or $6.79 per share, a year earlier.

The results were well below analysts’ projections of $7.82 per share, according to FactSet.

Cigna’s stock, which trades on the New York Stock Exchange under the symbol CI, fell 12% in pre-market trading following the earnings release. The stock fell more than 8% when trading opened.

Cigna said that its adjusted income from operations for the full year was $7.7 billion, or $27.33 per share, compared to $7.4 billion, or $25.09 per share, for 2023.

The decline was primarily attributed to lower contributions from Cigna Healthcare due to higher stop-loss medical costs. It said that was partially offset by strong contributions from Evernorth Health Services, particularly within specialty and care services.

Stop-loss insurance protects against catastrophic claims, which helps manage the risk for companies that use a self-funded health insurance model.

"While higher medical costs in our stop-loss product impacted fourth quarter earnings, we are taking corrective actions to address these near-term pressures and we are simultaneously taking steps to further advance our long-term growth strategy," said David M. Cordani, chairman and CEO of The Cigna Group.

Cigna also said the previously announced sale of its Medicare businesses to Health Care Service Corp. is expected to close in the first quarter of this year. 

In January 2024, HCSC signed an agreement with Cigna to acquire its Medicare Advantage, Medicare Supplemental Benefits, Medicare Part D and CareAllies businesses for $3.3 billion.

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