Cigna (NYSE: CI) reported fourth-quarter income and revenue that exceeded analyst expectations, as strong growth in its specialty pharmacy operations helped offset rising medical costs. Shares of the healthcare group climbed more than 3% intra-day on Thursday following the results.

Rising demand for government-backed healthcare services in recent years has pressured costs across the insurance industry, but Cigna has increasingly leaned on its pharmacy benefits business and employer-sponsored health plans. The company no longer offers Medicare Advantage plans for individuals aged 65 and older.

Evernorth, Cigna's division that includes its pharmacy benefit management operations, recorded a 20% year-over-year increase in revenue to $36.3 billion, supported in part by new client additions. Growth was also driven by the company's specialty pharmacy unit, which focuses on higher-cost medications.

Cigna's quarterly medical care ratio, which measures the portion of premium revenue spent on clinical services, rose to 88% from 87.9% a year earlier and exceeded expectations of 87.4%, indicating higher spending on medical care.

Despite this increase, Cigna posted adjusted operating earnings of $8.08 per share for the quarter, beating Bloomberg consensus estimates of $7.88. Adjusted revenue rose 10% year over year to $72.50 billion, well above analyst expectations of $69.53 billion.

For fiscal 2026, Cigna said it expects adjusted operating earnings per share of at least $30.25 and adjusted revenue of approximately $280 billion. The company projected a full-year healthcare medical care ratio of 83.0% to 84.7%.