By Emily Dattilo

Cigna Group stock was falling sharply after the health insurer missed quarterly earnings estimates and issued light guidance amid higher medical costs.

Cigna stock dropped 9% to $276 in premarket trading Thursday.

For its fourth quarter, the company reported adjusted earnings of $6.64 per share, missing Wall Street's call for $7.82, according to FactSet. Revenue of $65.65 billion was above the consensus estimate of $63.44 billion.

The medical cost ratio, an important measure of how premiums are paid out to cover expenses, was 87.9%, while analysts had anticipated a medical cost ratio of 84.7%.

"While higher medical costs in our stop loss product impacted fourth quarter earnings, we are taking corrective actions to address these near-term pressures and we are simultaneously taking steps to further advance our long-term growth strategy," said CEO David Cordani in the earnings release. Stop loss insurance limits the amount an employer is liable to pay in the event of a claim, according to the Cigna website.

For 2025, Cigna forecasts adjusted earnings of at least $29.50 a share. Analysts had penciled in $31.48.

The board of directors raised the quarterly dividend 8% to $1.51 per share and approved an increase of $6 billion in incremental share repurchase authorization.

Write to Emily Dattilo at emily.dattilo@dowjones.com

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January 30, 2025 07:29 ET (12:29 GMT)

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