New enrollments push Anthem beyond expectations in first quarter

Anthem Inc. delivered a better-than-expected first quarter and pushed its 2021 forecast past expectations, as growing enrollment and a pharmacy benefits business lifted the Indianapolis-based health insurer.

The Blue Cross-Blue Shield insurer said Wednesday that it now expects full-year earnings to come in at greater than $25.10 per share after starting 2021 with a forecast that fell well short of Wall Street projections.

Analysts now expect, on average, earnings of $24.70 per share, according to FactSet.

The company covers more than 43 million people in several states, including big markets like New York and California. It also runs a pharmacy benefits management business called IngenioRx.

Enrollment in state and federally funded Medicaid plans that Anthem manages jumped 20%, to about 9.2 million people, compared with the same three months last year. That helped counter a drop in its more profitable commercial coverage, which includes employer-sponsored insurance.

Enrollment in Medicare Advantage plans, privately run versions of the government’s Medicare program, also grew to 1.5 million, a 15% increase.

The enrollment growth and IngenioRx boosted the company’s operating revenue by 9%, to $32.1 billion in the quarter. The figure excludes investment gains.

Wall Street had been looking for revenue of $32.97 billion.

Profit climbed 9%, to $1.66 billion, even though the company’s commercial business took a hit from costs tied to the COVID-19 pandemic, with Anthem covering the administration of tests and vaccinations.

Adjusted earnings totaled $7.01 in the quarter that ended March 31. Analysts were expecting $6.38 per share on average.

Shares of Anthem Inc. slipped $1.03, to $380.85 in morning trading Wednesday. The stock had already climbed about 19% so far this year, as of Tuesday’s close.