Cigna raises 2026 earnings outlook despite pharmacy profit pressure

The Cigna Group (NYSE:CI) raised its 2026 adjusted earnings outlook after third-quarter revenue climbed 6% to US$73.7 billion, but the result came with a familiar fault line: stronger medical operations and specialty services were offset by pressure in Pharmacy Benefit Services.

Adjusted income from operations was US$2.1 billion, or US$7.98 per share, compared with US$2.1 billion and US$7.83 per share a year earlier. The company lifted its full-year adjusted income from operations outlook by US$0.15 to at least US$30.60 per share. That is a non-GAAP measure, and Cigna did not provide a forward-looking reconciliation to GAAP net income because future investment results and special items cannot be predicted without unreasonable effort.

Pharmacy pressure offsets specialty growth

Evernorth Health Services produced US$63.8 billion in adjusted revenue for the quarter, up 6%, while pre-tax adjusted income from operations fell 4% to US$1.8 billion. Pharmacy Benefit Services revenue increased 9% to US$37.3 billion, primarily reflecting drug mix, but its adjusted operating income dropped 22% to US$765 million as large client renewals and strategic investments weighed on the division.

Specialty and Care Services provided the counterweight. Its adjusted operating income rose 15% to US$1.1 billion, supported by organic growth in specialty businesses and increased adoption of biosimilar and specialty generic medicines. That adoption also lowered costs for clients and patients, according to the company, while specialty pharmacy revenue declined.

Cigna Healthcare delivers stronger quarter

Cigna Healthcare’s adjusted revenue rose 9% to US$11.7 billion, while pre-tax adjusted income from operations increased 15% to US$1.2 billion. The company attributed the improvement primarily to premium rate increases, higher net investment income and better operating efficiency. Its medical care ratio was 85.0%, compared with 84.8% a year earlier, and the full-year outlook remains 84.2% plus or minus 25 basis points.

The segment’s progress sits alongside a planned exit from the Individual and Family Plans medical business from January 1, 2027. Across the group, total customer relationships fell 6% from December 2025 to 177.6 million, including a 5% decline in pharmacy customers and a 19% drop in behavioural customers after the termination of a government contract. Cigna said the behavioural contract had minimal impact on revenue and adjusted operating income, while medical customers increased 2% to 18.5 million.

US$3 billion programme sets execution test

At its 2026 Investor Day, Cigna introduced its “Lead to One” vision and announced “Accelerate to One”, a multiyear US$3 billion modernisation and productivity initiative. It also set long-term targets including adjusted EPS compound annual growth of 10% to 14% and approximately US$50 billion in cumulative operating cash flow through 2030.

Those ambitions arrive as reported shareholders’ net income fell to US$1.4 billion, or US$5.47 per share, from US$1.9 billion and US$6.98 per share in the prior-year quarter, largely because the earlier period included an after-tax gain on sale. Cigna had repurchased 1.8 million shares for about US$500 million by November 4, and its debt-to-capitalisation ratio improved to 41.8% from 43.0% at the end of 2025.