By Manojna Maddipatla and Amruta Khandekar
(Reuters) -Cigna Corp on Thursday joined rival U.S. health insurers in signaling a lower hit from costs related to COVID-19 next year and maintained its target of at least 10% earnings growth over a newly raised 2021 adjusted profit estimate.
Shares were up about 2% in early trade.
Larger rivals UnitedHealth Group (NYSE:UNH) and Anthem also raised their 2021 adjusted profit view and forecast smaller pandemic impact next year as infections decline and more people get inoculated.
Cigna (NYSE:CI) moderately raised its outlook for 2021 adjusted profit from operations by 15 cents to at least $20.35 per share, including a negative impact from COVID-19. The company, however, did not specify how much the impact would be per share.
"As time progresses, COVID-related impacts and the ongoing performance of the business are becoming more intertwined. Therefore, we no longer believe it's instructive to continue to quantify the impact of COVID-19," Cigna's Chief Financial Officer Brian Evanko said.
Cigna had forecast a hit of about $2.50 per share to its 2021 adjusted earnings in August.
The company's decision to not quantify the impact indicates "it was a material headwind in 2021 that should subside in 2022," Cowen analyst Gary Taylor said.
Cigna reported better-than-expected third-quarter profit on the back of a near 13% jump in revenue from its health services unit that includes the pharmacy benefits management business.
However, its medical care ratio (MCR), the amount spent on medical claims versus income from premiums, worsened to 84.4% in the third quarter from 82.6% a year earlier, compared with an estimate of 83.93%, according to four analysts polled by Refinitiv.
The company now expects 2021 MCR to be between 84.0% and 84.5%, up from its prior forecast of 83.0% to 84.0%.
Excluding special items, Cigna's income from operations was $5.73 per share, above analysts' estimate of $5.23 per share, according to Refinitiv IBES data.