Anthem Revenue Grows on Government Business
January 27 2016 - 8:10AM
Dow Jones News
Health insurer Anthem Inc. on Wednesday posted a
better-than-expected increase in revenue in the final quarter of
the year, driven in part by strong performance in its
government-business segments.
The company also said it expects revenue for the 2016 year in
the range of $80 billion to $81 billion. Analysts polled by Thomson
Reuters were expecting $82.98 billion.
In the latest quarter, medical enrollment grew 2.9% from a year
earlier to about 38.6 million as of Dec. 31. Revenue in the
government-business segment jumped 17.4% to $10.6 million.
Anthem said the increase was driven by improved medical cost
performance in the Medicare business and enrollment increases in
the Medicaid business.
Enrollment in its commercial and specialty business edged up
1.1% from a year earlier to 29.68 million members, while members in
its government business grew 9.7% to 8.9 million.
Overall, the company posted a profit of $180.9 million, or 68
cents a share, down from $506.7 million, or $1.80 a share, a year
earlier. Anthem said results in the quarter included a net negative
adjustment of 46 cents a share, compared with six cents a share in
the same quarter last year. On an adjusted basis, earnings were
$1.14, down from $1.86. Revenue climbed 6.3% to $20.19 billion.
Analysts surveyed by Thomson Reuters forecast per-share earnings
of $1.22 on revenue of $19.90 billion.
Medicaid membership jumped 13.9% from the prior-year period to
5.91 million in the quarter. Revenue from premiums grew 6.6% to
$18.75 billion.
Anthem's medical benefit ratio—the amount of premiums used to
pay patient medical costs—was 87% in the fourth quarter, up from
84.5% a year earlier. The climb was largely driven by an increase
in the individual and local group businesses.
In July, Anthem agreed to buy Cigna Corp. for $48 billion,
capping months of merger frenzy among top U.S. health insurers that
is set to reshape the industry. The deal combines the second- and
fifth-largest health insurers by revenue and would create a company
with a huge footprint in commercial insurance, the type of coverage
provided to employers and consumers. Last month, Cigna shareholders
voted to approve the merger.
The biggest companies in the field are seeking more cost
efficiency and scale as the health-care landscape changes because
of the Affordable Care Act and other factors.
Shares of Anthem, which have fallen 4.8% over the past three
months, were inactive premarket at $137.76.
Write to Anne Steele at Anne.Steele@wsj.com
(END) Dow Jones Newswires
January 27, 2016 07:55 ET (12:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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