Anthem tops 3Q forecasts |
Oct 28, 2020 |
Indianapolis (AP) – Anthem delivered a better-than-expected third quarter even though a jump in benefit expenses and other costs contributed to an 81% drop in the health insurer’s net income.
The Blue Cross-Blue Shield coverage provider also said Wednesday that it was leaving its 2020 earnings forecast unchanged, as insurers continue to deal with uncertainty caused by the COVID-19 pandemic.
Anthem covers more than 42 million people in several states, including big markets like New York and California. It also runs a pharmacy benefits management business called IngenioRx.
The insurer booked adjusted earnings of $4.20 per share in the quarter that ended September 30. Operating revenue, which excludes investment gains or losses, climbed 16% to $30.65 billion. Analysts expected, on average, earnings of $4.04 per share on $29.81 billion in revenue, according to Zacks Investment Research.
Higher investment income largely drove the better-than-expected performance, Jefferies analyst David Windley said in a research note.
Anthem’s net income fell to $222 million from $1.18 billion in last year’s quarter. The company’s benefit expense climbed 10%, and selling, general and administrative costs soared 55% partially due to a litigation settlement and the return of a health insurance tax this year.
Total enrollment was nearly flat compared to June, and the insurer lost 281,000 customers from its commercial and specialty coverages.
But Windley noted that that the decline in Anthem’s employer-sponsored group coverage slowed compared to the second quarter, which he called an encouraging trend.
Indianapolis-based Anthem Inc. said it still expects adjusted earnings for 2020 to surpass $22.30 per share.
For the full year, analysts expect adjusted earnings of $22.46 per share, according to FactSet.
Company shares dropped more than 4% to $285.57 before markets opened Wednesday.