Insurer Anthem hikes 2018 forecast after 2Q earnings beat

Anthem topped Wall Street earnings expectations for the second quarter and raised its 2018 forecast, as acquisitions and another dip in medical expenses helped the Blue Cross-Blue Shield health insurer.

The nation's second-largest health insurer said Wednesday that it now expects full-year adjusted earnings of greater than $15.40 per share, after predicting more than $15.30 per share in April.

Analysts forecast adjusted earnings of $15.41 per share, according to FactSet.

In the second quarter, Anthem's biggest cost, medical expenses slipped 1 percent to $17.73 billion after falling 3 percent year over year in the first-quarter. That plus some acquisitions and enrollment gains in Anthem's Medicare business helped net income climb 23 percent to $1.05 billion in the second quarter.

The Blue Cross-Blue Shield insurer's total enrollment fell 2 percent to 39.5 million people due to Anthem's pull back from the Affordable Care Act's public insurance exchanges and losses from its Medicaid business, which provides coverage for the poor and people who have disabilities.

Excluding investment income, operating revenue rose 2 percent to $22.71 billion, helped in part by premium hikes and the return this year of a health insurance tax.

That missed Street forecasts. Analysts surveyed by Zacks Investment Research expected $22.75 billion in the quarter.

But the insurer's adjusted earnings of $4.25 per share surpassed the average analyst expectation of $4.19.

Anthem Inc., based in Indianapolis, sells coverage in several states, including big markets like New York and California. The company is the third major insurer so far to report Street-topping second-quarter earnings, following UnitedHealth Group Inc. and Centene Corp.

Anthem shares rose 1 percent, or $2.72 to $248.80 in early-morning trading Wednesday. The stock had increased slightly more than 9 percent since the beginning of the year and 29 percent in the last 12 months.

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Elements of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report on ANTM at https://www.zacks.com/ap/ANTM