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May 7 (Reuters) - Cigna Corp on Friday raised its full-year profit and revenue targets after first-quarter profit topped estimates, betting on its newly rebranded health services unit to help drive growth amid COVID-19-related uncertainty.
Cigna's rivals UnitedHealth and Anthem Inc last month raised their adjusted profit targets for the year, signaling confidence in their business despite continued uncertainty related to the pandemic.
Health insurers have been facing several challenges due to the COVID-19 pandemic, including direct costs related to testing, treatment and vaccinations as well as higher disenrollment in their employer-sponsored plans due to the pandemic's economic impact.
However, Cigna's health services unit, which was rebranded last September to Evernorth, has shown resilient growth in the last few quarters.
The unit, comprising the pharmacy benefits management business Cigna acquired through the 2018 buyout of Express Scripts, helped Cigna beat first-quarter profit estimates as it posted nearly 13% growth in adjusted revenue from a year earlier.
Cigna also reported lower-than-expected medical costs in the quarter despite higher costs related to COVID-19 testing, treatment and vaccines.
The company's medical-care ratio, the amount spent on medical claims versus the income from premiums, worsened to 81.8% in the quarter from 78.3% a year earlier.
Five analysts polled by Refinitiv had pegged the medical-care ratio at 82.8%.
Cigna reiterated that it anticipates a negative earnings impact of about $1.25 per share this year from COVID-19.
Excluding items, it earned $4.73 per share in the first-quarter, beating analysts' average estimate of $4.38, according to IBES data from Refinitiv.
Cigna said it now expects adjusted income from operations of at least $20.20 per share for 2021, up from its previous forecast of $20 per share, and adjusted revenue of at least $166 billion, up from at least $165 billion forecast earlier. (Reporting by Manojna Maddipatla in Bengaluru; Editing by Vinay Dwivedi)