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Cigna Stock Is Up on 'Strong, High-Quality Results'

Earnings for the health insurer were 4.2% higher than Wall Street analysts expected, giving Cigna a lift after a rough year.

Earnings for the health insurer were 4.2% higher than Wall Street analysts expected.

Shares of the health-insurance giant Cigna jumped 2.6% in premarket trading on Thursday after the company beat earnings expectations by 4.2%.

Cigna (ticker: CI) reported earnings per share of $4.54 for the third quarter, beating the $4.36 consensus estimate among Wall Street analysts, according to FactSet.

The company also raised its full-year 2019 guidance for per-share adjusted income from operations, to between $16.80 and $17, from between $16.60 and $16.90.

“These are strong, high-quality results that should be positively received by investors,” wrote BMO Equity Research analyst Matt Borsch in a note out Thursday morning.

The back story. Shares of Cigna were down 7.1% this year through the close of trading on Wednesday. Along with the rest of the managed-care sector, Cigna has been pressured by worries over political risks. Democratic presidential candidates have promised changes to the health-insurance system that could threaten Cigna’s business.

Cigna merged with pharmacy benefit manager Express Scripts at the end of 2018,

What’s new. In its earnings release, Cigna said that its total base of medical customers was 17.1 million people, up from 16.9 million in the third quarter last year.

“’Cigna’s strong results and continued momentum reflect the differentiated value we create for our customers and clients,” said the company’s CEO, David Cordani, in a statement. “Our combination with Express Scripts enables us to leverage industry-leading capabilities and more rapidly innovate to enhance clinical and cost outcomes for those we serve.”

Looking ahead. The earnings received early praise from the Street. “CI’s results should be enough to satisfy investors,” wrote Jefferies analyst David Windley. “The two most important metrics were better than expected: Health Services earnings beat consensus by 3% and Integrated Medical’s [medical loss ratio] was 30bps below the Street.” Basis points, or bps, are hundredths of a percentage points.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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