Despite Settlement Payout, Investors Are Bullish on Anthem

Anthem, Inc.’s third-quarter 2020 earnings were not as robust as investors had hoped at the start of the year due to the insurer’s obligation to pay out its $594 million share of a recently settled lawsuit against Blue Cross Blue Shield plans. Despite that, Wall Street analysts were positive about the firm’s outlook for the rest of the year.

The insurer reported that its quarterly adjusted net income was $4.20 per share, which Citi analyst Ralph Giacobbe said beat a Wall Street consensus projection of $4.12. Anthem CEO Gail Boudreaux said during an Oct. 28 earnings call that the earnings per share (EPS) figure was down 14% year over year. Anthem posted a medical loss ratio (MLR) of 86.8%, which Giacobbe noted was lower than a consensus 87.2%. Anthem’s revenues increased by 15.9% year over year to $30.6 billion, which Chief Financial Officer John Gallina attributed largely to growth in the firm’s Medicare and Medicaid businesses. The firm projects end-of-year earnings to exceed $22.30 per share.

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Peter Johnson

Peter Johnson

Peter has worked as a journalist since 2011 and has covered health care since 2020. At AIS Health, Peter covers trends in finance, business and policy that affect the health insurance and pharma sectors. For Health Plan Weekly, he covers all aspects of the U.S. health insurance sector, including employer-sponsored insurance, Medicaid managed care, Medicare Advantage and the Affordable Care Act individual marketplaces. In Radar on Drug Benefits, Peter covers the operations of (and conflicts between) pharmacy benefit managers and pharmaceutical manufacturers, with a particular focus on pricing dynamics and market access. Before joining AIS Health, Peter covered transportation, public safety and local government for various outlets in Seattle, his hometown and current place of residence. He graduated with a B.A. from Colby College.

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