(Reuters) - Health insurer Cigna Corp (CI.N) reported a better-than-expected quarterly adjusted profit from operations, driven by increased premium revenue and improved management of medical costs.
Premiums and fees from the company’s Global Health Care unit, its largest, rose 9.3 percent to $6.25 million, partly due to an increase in memberships in its commercial business.
Cigna manages insurance plans for large companies and sells health plans on government exchanges created under the U.S. Affordable Care Act, often called Obamacare. It also offers dental and other benefits.
The medical care ratio for Cigna’s Global Health Care unit improved to 81.6 percent in the fourth quarter from 82.1 percent a year earlier.
The ratio represents how much an insurer spends on medical claims compared with its income from premiums and is closely watched by investors as it reflects the company’s medical spending.
Cigna also said it expected full-year adjusted income from operations in the range of $2.1 billion-$2.2 billion, or $8.00-$8.40 per share. Analysts were expecting 2015 earnings of $8.17 per share.
The forecast includes acquisition-related expenses of about 40 cents per share, Cigna said.
The company, on Wednesday, said it had chosen Gilead Inc’s (GILD.O) Harvoni as its preferred treatment for hepatitis C over AbbVie Inc’s (ABBV.N) Viekira Pak, after negotiating a discount with Gilead.
Cigna’s net income attributable to shareholders rose to $467 million, or $1.77 per share, in the quarter ended Dec. 31, from $361 million, or $1.29 per share, a year earlier.
The year-earlier quarter included a special charge of $40 million related to organizational costs.
Excluding items, Cigna reported an adjusted income from operations of $1.69 per share, above the average analyst estimate of $1.67, according to Thomson Reuters I/B/E/S.
Total revenue rose nearly 10 percent to $8.93 billion, beating the average analyst estimate of $8.89 billion.
Cigna’s shares closed at $110.10 on the New York Stock Exchange on Wednesday. The stock rose about 19 percent in 2014, compared with a 24 percent rise in the larger Dow Jones Healthcare index .DJUSHC.
Reporting by Amrutha Penumudi in Bengaluru and Caroline Humer in New York; Editing by Simon Jennings