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Cigna posts flat adjusted income in Q4'16, expects growth in '17 earnings

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Cigna posts flat adjusted income in Q4'16, expects growth in '17 earnings

Cigna Corp. posted flat adjusted income from operations per share in the fourth quarter of 2016, but it expects strong earnings growth in 2017.

The insurer reported fourth-quarter 2016 adjusted income from operations of $485 million, or $1.87 per share, compared with $486 million, or $1.87 per share, in the year-ago period. The company saw continued strong results in its commercial healthcare and global supplemental benefits businesses and gained from actions taken to improve results in the seniors and disability and life businesses, Cigna said.

The S&P Capital IQ consensus normalized EPS estimate for the fourth quarter of 2016 was $1.74.

Shareholders' net income for the fourth quarter of 2016 was $382 million, or $1.47 per share, down from $426 million, or $1.64 per share, in the year-ago period. Fourth-quarter 2016 shareholders' net income included special item charges of $119 million after tax, or 46 cents per share, for the establishment of an allowance against risk corridor program receivables and transaction costs related to Cigna's proposed merger with Anthem Inc.

Fourth-quarter 2016 total revenues hit $9.94 billion, up from $9.53 billion in the prior-year quarter.

Cigna's global medical customers were 15,197,000 as of Dec. 31, 2016, compared with 15,177,000 as of Sept. 30, 2016, and 14,999,000 as of Dec. 31, 2015.

For 2016, the company reported adjusted income from operations of $2.10 billion, or $8.10 per share, down from $2.26 billion, or $8.66 per share, in 2015.

The S&P Capital IQ consensus normalized EPS estimate for 2016 was $7.98.

In 2016, Cigna repurchased 785,000 shares of common stock for approximately $110 million.

For 2017, the company is expecting consolidated adjusted income from operations of between $2.35 billion and $2.48 billion, or $9.00 per share to $9.50 per share. The outlook excludes the impact of additional prior-year reserve development and potential effects of any future capital deployment. The company expects adjusted income from operations in the range of approximately $2.04 billion to $2.12 billion in its global healthcare business, $295 million to $315 million in global supplemental benefits, $200 million to $230 million in group disability and life and $2.53 billion to $2.66 billion in ongoing businesses.

The S&P Capital IQ consensus normalized EPS estimate for 2017 is $9.57.

Total revenue growth for 2017 is projected to be 2% to 3%. Global medical customer growth is expected to be between 300,000 and 500,000 lives.