Cigna Thursday reported a $300 million first quarter loss as the corporate’s Evernorth well being providers … [+]
The Cigna Group reported a $300 million first quarter loss as the corporate’s Evernorth well being providers enterprise grapples with the loss in worth of its funding in doctor-staffed clinic operator VillageMD.
On Thursday, Cigna reported a “non-cash funding loss” of $1.8 billion, or $6.31 per share, “associated to the impairment of VillageMD fairness securities.” That turned an in any other case worthwhile quarter right into a backside line lack of $300 million, or 97 cents a share, in comparison with the primary quarter of 2023 when Cigna reported web earnings of $1.3 billion, or $4.24 per share.
Cigna’s Evernorth holds a minority stake in VillageMD, a Chicago-based startup now scaling again on the enlargement of physician practices and clinics the corporate connected to Walgreens. In late March, Walgreens reported a $6 billion loss in its second quarter due to the loss in worth of its controlling stake in VillageMD.
Tim Wentworth, who took over as Walgreens chief govt final October from Roz Brewer, has described VillageMD’s enlargement effort as needing to go on “a weight loss plan.” Wentworth has stated Walgreens and accomplice VillageMD have slowed the quantity clinic openings partially as a result of the operators haven’t been capable of fill their so-called “affected person panels,” that are a sure variety of particular person sufferers underneath the care of a particular supplier.
Other than the loss attributable to its clinic funding, Cigna’s underlying companies carried out nicely with whole income up 23% to $57.3 billion within the first quarter in comparison with $46.5 billion within the year-ago interval.
Cigna stated its adjusted earnings from operations for first quarter 2024 was $1.9 billion, or $6.47 per share, in contrast with $1.6 billion, or $5.41 per share, for first quarter 2023, reflecting “sturdy contributions” from each Cigna Healthcare, which incorporates an array of business and authorities medical health insurance plans, and Evernorth Well being Companies, which operates the Categorical Scripts pharmacy profit administration firm and the Accredo specialty pharmacy enterprise in addition to sure different medical care supplier providers.
Throughout all of its companies, prospects and well being plan members have been on the rise.
“Whole pharmacy prospects at March 31, 2024 elevated 25% from December 31, 2023 to 122.8 million attributable to new gross sales and the continued enlargement of relationships,” Cigna stated in its report . “Whole medical prospects at March 31, 2024 have been 19.2 million, primarily reflecting a year-to-date lower in particular person and household plans prospects, pushed by focused pricing actions in sure geographies.”
In contrast to rival medical health insurance corporations which might be seeing earnings negatively impacted attributable to seniors utilizing extra healthcare providers in Medicare Benefit well being plans an growing variety of insurers administer, Cigna didn’t report such issues. In reality, Cigna stated it stays on observe to promote its Medicare Benefit enterprise to Well being Care Service Corp., the guardian of Blue Cross and Blue Protect plans in 5 states.
“The sale of our Medicare companies to HCSC stays on observe with the expiration of the ready interval underneath the Hart-Scott Rodino Act having occurred on April 17,” Cigna stated. “The transaction is anticipated to shut within the first quarter of 2025.”
In the meantime, the efficiency of Cigna’s companies within the first quarter figured in Cigna administration’s resolution to extend its outlook for the remainder of this yr for adjusted earnings from operations to “a minimum of $28.40 per share,” the corporate stated.
“Our sturdy first quarter outcomes replicate the efficiency of our Evernorth and Cigna Healthcare companies, in addition to our management in addressing the evolving wants of these we serve with the breadth of our differentiated capabilities,” David M. Cordani, chairman and CEO of The Cigna Group stated in an announcement included in the company’s earnings release. “Constructing on our observe report of development and continued momentum in 2024, we’re happy to extend our outlook for full-year earnings.”
