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Investing.com -- The Cigna Group (NYSE:CI) on Thursday reported third-quarter earnings that exceeded analyst expectations, but shares in the global health company fell sharply after CEO David Cordani warned of profit headwinds in the company’s pharmacy benefits business over the next two years.
The global health company posted adjusted earnings of $7.83 per share for the third quarter, surpassing the analyst consensus of $7.64. Revenue climbed 10% YoY to $69.7 billion, above the $67.61 billion analysts had projected.
The company reaffirmed its full-year 2025 outlook for adjusted income from operations of at least $29.60 per share, slightly below the consensus estimate of $29.63.
But Cigna shares tumbled roughly 10% following the market open after Cordani told investors the pharmacy benefits segment, which accounts for roughly 30% of operating earnings, will face margin pressure through 2026.
While Cigna still expects earnings per share to rise in 2026, profit in that unit will decline next year, he said.
Cigna’s operating income dipped slightly in the quarter due to weaker results in its medical insurance business.
This week, Cigna also announced plans to move away from rebate-based pricing in its Express Scripts unit—the largest U.S. pharmacy benefits manager. The new model will negotiate upfront drug discounts instead of relying on rebates paid later, a shift aimed at lowering out-of-pocket costs for patients and reshaping how billions flow among drugmakers, insurers, and employers.
"Our strong quarterly results reflect the breadth of our businesses and focused execution on our growth strategy, even in a dynamic environment," said David M. Cordani, chairman and CEO of The Cigna Group, in the earnings release.
The company’s Evernorth Health Services segment was a key growth driver, with adjusted revenues increasing 15% compared to the same period last year. Pharmacy Benefit Services revenue jumped 18%, while Specialty and Care Services revenue rose 10%, reflecting strong specialty volume growth and increased adoption of biosimilars.
Cigna Healthcare saw its adjusted income from operations decrease 12% compared to the third quarter of 2024, primarily due to a higher medical care ratio, which rose to 84.8% from 82.8% a year earlier.
Total pharmacy customers increased 4% from December 2024 to 122.5 million, while total medical customers decreased 6% to 18.1 million, primarily reflecting the impact of the HCSC transaction completed in March 2025.
The company also announced a new rebate-free pharmacy benefit model designed to lower costs and improve transparency for customers.
(Sam Boughedda contributed to this report.)