Anthem (ANTM) Tops Q4 EPS by 25c, Miss on Revenues; Offers FY19 EPS/Revenue Guidance Above Consensus
Anthem (NYSE: ANTM) reported Q4 EPS of $2.44, $0.25 better than the analyst estimate of $2.19. Revenue for the quarter came in at $23.373 billion versus the consensus estimate of $23.38 billion.
- Fourth quarter net income was $1.61 per share, including net negative adjustment items of $0.83 per share. Adjusted net income was $2.44 per share.
- Full year net income was $14.19 per share, including net negative adjustment items of $1.70 per share. Adjusted net income was $15.89 per share.
- Medical enrollment increased by 37 thousand members sequentially to 39.9 million members.
- Operating gain grew by 30% year-over-year to $5.4 billion in 2018.
- IngenioRx now scheduled to launch in 2Q 2019.
- Full year 2019 net income is expected to be greater than $18.00 per share, an increase of 27% versus 2018 net income per share. Adjusted net income is expected to be greater than $19.00* per share, an increase of 20% versus 2018 adjusted net income per share.
- Quarterly dividend increased by 6.7% to $0.80 per share.
"In 2018, we achieved our objectives of improving execution and strengthening our value proposition with innovative and affordable solutions designed to more effectively meet the unique needs of our customers," said Gail K. Boudreaux, President and CEO. "Our fourth quarter and full year performance provides a strong foundation for 2019. In addition, I am pleased to announce that we are accelerating the launch of IngenioRx and now expect to begin transitioning members in the second quarter of this year. Since announcing our intent to create IngenioRx, we have been carefully planning the transition, including the possibility of an early launch, and are confident in our ability to execute the transition under the accelerated schedule. This will allow us to go to market with better economics earlier, and also accelerate our whole person health strategy, which is proven to reduce total cost of care."
GUIDANCE:
Anthem sees FY2019 EPS of $19.00, versus the consensus of $17.61. Anthem sees FY2019 revenue of $100 billion, versus the consensus of $97.67 billion.
Full Year 2019:
- GAAP net income is expected to be greater than $18.00 per share, including approximately $1.00 per share of net unfavorable items. Excluding these items, adjusted net income is expected to be greater than $19.00* per share.
- Medical membership is expected to be in the range of 40,900,000 - 41,300,000. Fully-insured membership is expected to be in the range of 15,500,000 - 15,700,000 and self-funded membership is expected to be in the range of 25,400,000 - 25,600,000.
- Operating revenue is expected to be approximately $100.0 billion, including premium revenue of $90.5 billion - $92.5 billion.
- Benefit expense ratio is expected to be in the range of 86.2% plus or minus 30 basis points.
- Cost of products sold of $1.6 billion - $1.8 billion.
- SG&A ratio is expected to be in the range of 13.5% plus or minus 30 basis points.
- Operating cash flow is expected to be greater than $5.2 billion.
- Share count is expected to be between 261 - 263 million.
- Effective tax rate is expected to be between 19.5% - 21.5%.
- Investment income is expected to be $1.0 billion.
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