NEW YORK (TheStreet) -- Cigna (CI) shares are up 3.4% to $82.77 on Thursday following the release of the company's first quarter earnings report.
Revenues increased to $8.5 billion in the quarter, a 4% rise from the year ago quarter, beating analysts estimates of $7.72 billion.
The global health services company reported net income of $501 million, or $1.83 per diluted share, beating analysts estimates by 29 cents.
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TheStreet Ratings team rates CIGNA CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CIGNA CORP (CI) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Despite its growing revenue, the company underperformed as compared with the industry average of 10.4%. Since the same quarter one year prior, revenues slightly increased by 7.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.50, is low and is below the industry average, implying that there has been successful management of debt levels.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- CIGNA CORP's earnings per share declined by 8.5% in the most recent quarter compared to the same quarter a year ago. The company has suffered a declining pattern of earnings per share over the past year. However, we anticipate this trend reversing over the coming year. During the past fiscal year, CIGNA CORP reported lower earnings of $5.20 versus $5.61 in the prior year. This year, the market expects an improvement in earnings ($7.16 versus $5.20).
- The change in net income from the same quarter one year ago has exceeded that of the Health Care Providers & Services industry average, but is less than that of the S&P 500. The net income has decreased by 11.1% when compared to the same quarter one year ago, dropping from $406.00 million to $361.00 million.
- You can view the full analysis from the report here: CI Ratings Report