It was a healthy quarterly blowout for Cigna (CI).
The health services provider said Thursday its second quarter earnings came in at $4.30 a share, crushing Wall Street estimates for $3.74 a share. Total sales came in at $34.4 billion, topping forecasts for $33.2 billion.
Cigna credited more new business in its commercial services business and new services for the strong quarter. The acquisition of pharmacy benefit manager Express Scripts — a deal Cigna closed on in December 2018 — also propped up results.
Cigna CEO David Cordani in particular called out product innovation and customer loyalty as key drivers of the quarter in an interview with Yahoo Finance.
“At the core it’s strong fundamentals. By delivering great services to our clients and customers we are able to retain an extremely large amount of our clients and customers,” Cordani said. “We also earned the right to expand our services through continued innovation and that’s helping us grow. We also earned net new customers.”
The company’s outlook suggests Cigna sees its momentum continuing into yearend. Cigna lifted its full year earnings guidance by 25 cents to 35 cents a share to $16.90 a share. Previously, Cigna guided to $16.65 a share.
Cigna also disclosed it sees 97% to 98% client retention in its health services business (mostly the Express Scripts business) in 2020, up about 50 basis points from its prior outlook.
After an initial pop on the results, Cigna shares were trading roughly flat by early afternoon trading.