(Reuters) - Cigna Corp CI.N 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.

FILE PHOTO: A screen displays the logo fro Cigna Corp. on the floor at the New York Stock Exchange (NYSE) in New York, U.S., July 16, 2019. REUTERS/Brendan McDermid

The company's foray into pharmacy benefits management (PBM) places it in direct competition with CVS Health Corp CVS.N and UnitedHealth Group Inc UNH.N, which also have similar units for negotiating deals on prescription drugs.

Yet, Cigna is confident of growing revenue from its health services unit that houses the new PBM business. It expects earnings to rise at a long-term rate of 10% to 13% in 2020 and beyond.

Chief Executive Officer David Cordani said given some negative accounting elements, such as the return of the health insurance tax, 2020 growth would be calculated from a base of $16.40 per share, implying adjusted earnings of $18.04 to $18.53 next year.

Analysts had forecast earnings of $18.71 per share for 2020.

Stephens analyst Scott Fidel said the higher Street estimate is, however, not an “apples to apples” comparison with Cigna’s forecast as it has not included share repurchases and some other potential accounting benefits in its outlook.

“This is something that we deal with every year with how Cigna guides versus how the Street models, but the company has ultimately ended up exceeding its preliminary guidance framework on a highly consistent basis year after year.”

Bernstein analyst Lance Wilkes called Cigna’s 2020 forecast “probably in line with consensus”, if share repurchases and other items were included in estimates.

For 2021, the insurer reiterated its earnings per share target of between $20 to $21.

In the reported quarter, Cigna’s $52 billion acquisition of Express Scripts helped amplify health services sales to $24.88 billion from $1.11 billion last year.

“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.

As Cigna added more customers and raised premiums, revenue from its U.S. health insurance business rose nearly 12% to $9.15 billion.

Cigna raised its forecast for 2019 adjusted income from operations to between $16.80 and $17 per share, from $16.60 to $16.90.

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%.

Excluding items, Cigna earned $4.54 per share, beating estimates of $4.36, according to IBES data from Refinitiv.

Total revenue more than tripled to $38.56 billion.