Cigna and Express Scripts Post Strong Q1 Earnings Ahead of Merger

Both organizations showed financial stability and improved outlooks for the rest of 2018.

Cigna Corp. and Express Scripts Holding Co. released separate first-quarter earnings reports as they aim to close a $52 billion merger by the end of 2018.

Express Scripts achieved a net income of $623.2 million during the first quarter, an increase of 14%, while reaffirming its expected 2019 retention rate range for this year's selling season of 96-98%. The organization's consolidated first-quarter adjusted earnings per diluted share were $1.77.

"Our first quarter results reflect our success in driving greater value for clients, delivering better health outcomes for patients and growth in earnings for shareholders," Tim Wentworth, CEO of Express Scripts said in a statement. "With our expected combination with Cigna, and the addition of eviCore, we are uniquely well positioned to transform healthcare for years to come."

For Cigna, total revenues for the first quarter increased 9% year-over-year to $11.4 billion, shareholders’ net income reached $915 million, registering at $3.72 per share, while adjusted income from operations was $1 billion, down from $1.2 billion at the start of the quarter.

The organization now projects its global medical customer base to grow by 400,000 to 500,000 people in 2018. Similarly, adjusted income from operations is projected to grow between 19% to 23%, a range of $3.17 billion to $3.27 billion.

"Cigna's strong first quarter performance was driven by the continued, effective execution of our proven growth strategy, which we expect to further accelerate through our pending combination with Express Scripts," David Cordani, CEO of Cigna, said in a statement.

Executives from both organizations expect the merger to be completed by the end of the year.

Below are highlights from Express Scripts' first-quarter earnings report:

Total adjusted claims fell 3%, registering 340.1 million patients.
Adjusted net income of $1 billion, an increase of 24%.
Adjusted earnings per diluted share were $1.77, up 33%.
Net cash flow provided by operating activities of $1.5 billion, up 51%.
Express Scripts repurchased a total of 5.4 million shares under its share repurchase program for $411.3 million during the first quarter.
The organization suspended its share repurchase program ahead of the merger with Cigna.

Below are highlights from Cigna's first-quarter earnings report:

Repurchased 1.3 million shares of common stock for approximately $275 million. Cigna does not expect to pursue additional share repurchases before closing the Express Scripts merger.
Total revenue growth is projected between 7% to 8% for the rest of 2018.
Consolidated adjusted tax rate of 24% to 25%.
Adjusted loss from operations was $40 million, which "improved sequentially" due to favorable impacts on corporate income taxes from stock-based compensation programs.
Executives said 2018 began with strong momentum and the organization will continue to focus on "deeper alignment."
The leadership believes the organization's growth strategy will accelerate pending the successful completion of its merger with Express Scripts.