beat@ (Adds background, analyst comment, share movement)
Oct 31 (Reuters) - Cigna Corp raised its full-year earnings target on Thursday, after reporting a better-than-expected quarterly profit boosted by its acquisition of pharmacy benefits manager Express Scripts last year.
Shares of the health insurer rose 2% to $180 in premarket trading.
Cigna's foray into pharmacy benefits management (PBM) places it in direct competition with CVS Health Corp and UnitedHealth Group Inc, which also have similar units for negotiating deals on prescription drugs.
Cigna's $52 billion acquisition of Express Scripts helped amplify sales at its health services unit to $24.88 billion in the third quarter from $1.11 billion a year earlier.
"Today's PBM results will... lead to greater confidence in the company's ability to deliver on full-year PBM guidance," said Barclays analyst Steve Valiquette, adding that concerns around PBM had limited gain in shares during much of the year.
As Cigna added more customers and raised premiums on health plans sold to self-insured customers and large employers, revenue from its U.S. health insurance business rose nearly 12% to $9.15 billion in the quarter.
"These are strong, high-quality results that should be positively received by investors," BMO Capital Markets analyst Matthew Borsch said in a note.
Cigna also raised its forecast for 2019 adjusted income from operations to between $16.80 and $17 per share, from a prior range of $16.60 to $16.90. Analysts were expecting $16.81 per share.
The company's medical care ratio, which compares the amount it spent on medical claims with income from premiums, increased to 80.5%, but beat estimates of 80.86%. A lower medical care ratio is better for health insurers.
The suspension of an industry-wide insurance fee and higher costs in the company's individual medical insurance business contributed to the increased medical care ratio during the quarter, Cigna said.
Net income rose to $1.35 billion, or $3.57 per share, in the quarter ended Sept. 30, from $772 million, or $3.14 per share, a year earlier.
Excluding items, Cigna earned $4.54 per share, beating the average analyst estimate of $4.36, according to IBES data from Refinitiv.
Total revenue more than tripled to $38.56 billion.
(Reporting by Saumya Sibi Joseph and Tamara Mathias in Bengaluru; Editing by Shinjini Ganguli)