By Leslie Small
Both Cigna Corp. and
WellCare Health Plans, Inc. delivered third-quarter 2019 earnings results that
beat Wall Street's expectations and largely impressed analysts — particularly
in light of other insurers' recent issues with medical loss ratio (MLR) results.
In its quarterly earnings
report posted on Oct. 31, Cigna said its strong financial results were driven
primarily by its health services and integrated medical segments.
The health services
segment, which includes the company's PBM business, reported a pretax operating
profit of $1.4 billion, beating Wall Street's consensus of $1.36 billion. The
insurer's integrated medical segment, which includes its health insurance
business, saw its pretax operating profit increase from $932 million to $953
million year over year.
Cigna's MLR of 80.5% was
higher than it was in the third quarter of 2018, as the company expected, but
it beat the 80.8% consensus estimate, "bucking the trend seen from
peers," Citi analyst Ralph Giacobbe observed in an Oct. 31 research note. Anthem,
Inc., for instance, said during its recent third-quarter earnings conference
call that its full-year 2019 MLR will likely be higher than it originally
estimated due to issues with Medicaid eligibility redeterminations that it's
experienced this year.
Across its books of
business, Cigna reported an adjusted earnings per share of $4.54, beating the
consensus $4.36, and it raised its full-year EPS estimate to a range of $16.80
to $17.00.
WellCare, which reported
its financial results on Oct. 30, "delivered impressive 3Q results,"
with its adjusted EPS of $5.50 beating the consensus estimate by 43%, Jefferies
analysts David Windley and David Styblo wrote in a research note.
WellCare's third-quarter
2019 MLR of 87.0% beat the consensus estimate by 130 basis points, which
Windley and Styblo described as a "pretty clean result."
From Health Plan Weekly
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