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Cigna’s stock leaps toward a 13-month high after earnings beat, raised dividend

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Shares of Cigna Group shot up toward a 13-month high Friday, after the health care services company reported a fourth-quarter earnings beat and raised its dividend by 14%, as pharmacy and medical customers increased.

The stock
CI,
+2.12%

rallied 6.2% in premarket trading, to put it on track to open at the highest price seen during regular-session hours since Jan. 3, 2023.

Net income came in at $2 billion, or $3.49 a share, after $1.53 billion, or $3.91 a share, in the same period a year ago, as shares outstanding declined 3.6%. Excluding nonrecurring items, adjusted earnings per share rose to $6.79 from $5.02 to beat the FactSet consensus of $6.54.

Revenue grew 11.7% to $51.11 billion, well above the FactSet consensus of $48.9 billion.

Pharmacy customers increased 5% to 98.6 million and medical customers rose 10% to 19.8 million, while customer relationships fell 7.7% to 164.4 million, due to the nonrenewal of a supplemental behavioral coverage contract with New York Life.

Separately, the company raised its quarterly dividend to $1.40 a share from $1.23 a share. Based on Thursday’s stock closing prices, the new annual dividend rate implies a dividend yield of 1.82%, above the implied yields for the Health Care Select Sector SPDR ETF
XLV
of 1.53% and the S&P 500
SPX,
+1.25%

of 1.44%.

Looking ahead, Cigna adjusted EPS of “at least” $28.25, which compares with the FactSet consensus of $28.29.

Cigna’s stock had soared 13.9% in December, the best monthly performance in 14 months, amid reports the company had walked away from talks to merge with health insurer Humana Inc.
HUM,
-0.59%
.

But the stock has still lost 3.6% over the past three months through Thursday, while the health care ETF has climbed 12.2% and the S&P 500 has gained 13.6%.

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