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Anthem's (ANTM) Q2 Earnings Beat Estimates, Up Y/Y
July 26, 2017

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Anthem, Inc. (ANTM - Free Report) is one of the premier healthcare service providers when it comes to providing medical and specialty products.

Already sporting one of the top position in the health insurance industry, the company is set to become a titan with the pending acquisition of another player Cigna Corp. Anthem is projected to become one of the top three health insurers. Also, the company is expected to witness significant earnings accretion from the deal.

The company has been working towards enhancing healthcare through the provision of reliable and superior quality services. The aforementioned deal is expected to help it in this regard.

However, adverse effect of the Health Insurance Provider (HIP) fee, increased financial leverage, higher medical costs in the Senior, Local Group and State-Sponsored businesses, lower favorable prior year reserve development and the impact of minimum medical loss ratio requirements are a drag.

Anthem has a decent history when it comes to earnings as the company has beaten estimates in three of the last four quarters, making for an average beat of 8.58%.

Currently, Anthem holds a Zacks Rank #2 (Buy), but that could definitely change following its earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

We have highlighted some of the key stats from this just-revealed announcement below:

Earnings:  Anthem beats on earnings. Our consensus called for EPS of $3.25, and the company reported EPS of $3.37.

Anthem, Inc. Price and EPS Surprise

Revenue: Operating revenues miss our estimate. Our consensus called for revenues of $22.3 billion, and the company reported revenues of $22.2 billion.

Key Stats to Note: Medical enrollment grew 1.6% to 40.4 million.

However, second quarter benefit expense ratio deteriorated 190 basis points year over year to 86.1%.

The selling, general and administrative expense ratio was 13.8%, improving 20 basis points year over year.

Operating cash flow for the second quarter was $393 million, or 0.5 times net income.

For 2017, the company expects adjusted net income to be greater than $10.35 per share,  medical membership is expected to be in the range of 40.2 million – 40.4 million; operating revenue to be roughly between $88.5 - $89.5 billion. Operating cash flow is expected to be greater than $3.5 billion

Check back later for our full write up on this ANTM earnings report later!

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