Anthem’s quarterly profit zooms to $1B, handily beating analysts’ expectations

Health insurer Anthem Inc. said profit climbed 44 percent in the first quarter, boosted by customer increases in the company's commercial and Medicaid business lines and premium increases.

The Indianapolis-based company, which operates Blue Cross Blue Shield plans in more than a dozen states, on Wednesday morning posted profit of $1 billion, or $3.73 a share.

Excluding one-time items, profit was $4.68 a share, compared with $3.46 in the year-ago quarter—beating Wall Street estimates by 83 cents a share. Analysts had expected the company to earn $3.85 a share, according to figures compiled by Thomson Reuters. Analysts’ estimates typically exclude special items.

Revenue for the quarter was $22.5 billion, up 11 percent. Growth “reflected premium rate increases to cover overall costs across our businesses,” the company said.

“Our first quarter 2017 earnings represent a strong start to the year as membership and operating revenue came in above our expectations,” CEO Joseph Swedish said in a statement.

The company’s press release did not mention any new developments in its proposed $54 billion acquisition of rival insurer Cigna Corp. In January, a federal judge blocked the deal, saying it would hurt competition, but Anthem has yet to say it will abandon it.

Anthem said medical enrollment climbed 2.6 percent from a year ago. Commercial and specialty enrollment increased by 471,000 members. Medicaid enrollment grew by 8 percent, or 507,000, to about 6.6 million people. Medicare edged up by 53,000.

Overhead costs dropped slightly, the company said, driven by “efficiency initiatives” and a one-year waiver of the health insurance tax this year.

Anthem projected that profit for the year will be $10.37 a share, or $11.60 a share excluding unspecified “net unfavorable items." Operating revenue for the year was projected in the range of $88 billion to $89 billion.