(Adds Cigna CEO comment on Express deal)
By Caroline Humer and Ankur Banerjee
May 3 (Reuters) - Cigna Corp reported a better-than-expected quarterly profit and raised its full-year forecast on Thursday, but investors remained concerned about its planned $52 billion acquisition of Express Scripts Holding Co , sending shares 2.6 percent lower.
Chief Executive Officer David Cordani said during a conference call with analysts he expected the deal for the pharmacy benefits manager to close this year.
But investors still wondered if the purchase will pass muster with antitrust regulators. And if so, what will the profitability be for companies like Express Scripts, which act as a middleman between drug companies and health plans and are under pressure to change how they handle drug discounts.
“Things look good for them on a standalone basis, but the market is still concerned about the transaction,” Evercore ISI analyst Michael Newshel said.
Cigna shares fell $4.42 to $167.94, and have fallen more than 10 percent since the deal was announced in March.
Health insurers are trying to change their businesses to drive down soaring costs. Aetna is being bought by CVS Health Corp in a $69 billion deal, and CVS hopes to cut costs by offering more health care services in pharmacies.
Cordani said he has told shareholders that buying Express Scripts will help cut client costs and enable Cigna to reduce increases in the cost of medical services.
Last year, medical costs for Cigna and its customers rose 3 percent, on average, and its 2021 goal is to lower cost increases to match the rise in the consumer price index. “We think that’s what the market demands,” Cordani said.
This year, the company expects cost increases of 4 percent to 5 percent.
The company, which focuses on large and medium-sized corporate healthcare plans as well as government-backed Medicare plans, said membership rose 3 percent to 16.2 million in the quarter ended March 31.
Net income jumped to $915 million, or $3.72 per share, in the first quarter, from $598 million, or $2.30 per share, a year earlier.
Excluding items, Cigna earned $4.11 per share, well above the average analyst estimate of $3.39, according to Thomson Reuters I/B/E/S.
Operating revenue rose 9.5 percent to $11.42 billion.
The company now expects adjusted income of $12.85 to $13.25 per share in 2018, compared with its previous forecast of $12.40 to $12.90 per share. (Reporting by Caroline Humer in New York and Ankur Banerjee in Bengaluru; Editing by Anil D’Silva, Saumyadeb Chakrabarty and JS Benkoe)