UPDATE: Anthem (ANTM) Reports In-Line Q4 EPS, Revenues In-Line; Offers FY20 EPS Guidance Below Consensus, FY20 Revenue Outlook Above Consensus

Anthem (NYSE: ANTM) reported Q4 EPS of $3.88, in-line with the analyst estimate of $3.88. Revenue for the quarter came in at $27.1 billion versus the consensus estimate of $27.1 billion.

• Fourth quarter net income was $3.62 per share, including net negative adjustment items of $0.26 per share. Adjusted net income was $3.88* per share.
• Full year net income was $18.47 per share, including net negative adjustment items of $0.97 per share. Adjusted net income was $19.44* per share.
• Fourth quarter operating revenue grew 16.4% year-over-year to $27.1 billion. Full year operating revenue grew 12.9% year-over-year to $103.1 billion.
• Medical enrollment ended the year at 41 million lives, with growth of 1.1 million members year-to-date, driven by the risk-based businesses.
• Full year 2020 GAAP net income is expected to be greater than $21.44 per share. Adjusted net income is expected to be greater than $22.30* per share, an increase of 14.7% versus 2019, including approximately $2.30 from the accelerated launch of IngenioRx.
• Quarterly dividend increased by nearly 19% to $0.95 per share.

“Anthem delivered strong results to close out 2019 featuring the successful launch of IngenioRx, as well as our largest organic risk-based growth in more than a decade,” said Gail K. Boudreaux, President and CEO. “We have strong momentum moving into 2020 and we will continue to deliver on our commitments to all those we serve.”

GUIDANCE:

Anthem sees FY2020 EPS of $22.30, versus the consensus of $22.71. Anthem sees FY2020 revenue of $117 billion, versus the consensus of $115.28 billion.

Full Year 2020:

• GAAP net income is expected to be greater than $21.44 per share, including approximately $0.86 per share of net unfavorable items. Excluding these items, adjusted net income is expected to be greater than $22.30* per share.
• Medical membership is expected to be in the range of 41.9 - 42.3 million. Fully-insured membership is expected to be in the range of 16.0 - 16.3 million and self-funded membership is expected to be in the range of 25.9 - 26.0 million.
• Operating revenue is expected to be approximately $117 billion, including premium revenue of $101 billion - $103 billion.
• Cost of products sold is expected to be in the range of $6.9 billion - $7.3 billion.
• Benefit expense ratio is expected to be in the range of 85.8% plus or minus 50 basis points.
• Local Group medical cost trend is expected to be 4.0% plus or minus 50 basis points, including the benefit of lower pharmacy cost from the launch of IngenioRx and medical cost management initiatives.
• SG&A ratio is expected to be in the range of 12.8% plus or minus 30 basis points.
• Operating cash flow is expected to be greater than $6.4 billion.
• Investment income is expected to be $970 million.
• Effective tax rate is expected to be between 24.0% - 26.0%.
• Share count is expected to be between 255 - 257 million.

For earnings history and earnings-related data on Anthem (ANTM) click here.

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