INDIANAPOLIS – Anthem’s third-quarter earnings slid nearly 6 per cent and missed Wall Street expectations, as rising medical costs countered revenue growth and some cost cutting for the nation’s second-largest health insurer.
The Blue Cross-Blue Shield insurer also updated on Wednesday a 2016 forecast that falls short of analyst forecasts.
Anthem said its largest expense, medical claims paid, climbed more than 9 per cent in the quarter to $16.92 billion. Operating revenue, which excludes investment gains, rose 7 per cent to $21.12 billion
Overall, the insurer earned $617.8 million in the quarter, down from $654.8 million last year. Earnings, adjusted for one-time gains and costs, totalled $2.45 per share in this year’s quarter.
Analysts expected, on average, earnings of $2.49 per share on $20.74 billion in revenue, according to Zacks Investment Research.
The Indianapolis-based insurer also said Wednesday it now expects 2016 adjusted earnings to total about $10.80 per share. In July, Anthem predicted earnings would surpass that amount.
Analysts expect, on average, earnings of $10.85 per share, according to FactSet.
Anthem Inc. runs Blue Cross Blue Shield plans in several states, including big markets like California, New York and Ohio. It’s trying to get bigger by pursuing an approximately $48-billion acquisition of rival Cigna Corp., but federal regulators sued this summer to block that deal. Anthem has vowed to fight the litigation.
The company’s stock rose $5.59, or 4.7 per cent, to $123.01 in midday trading. Its shares are down almost 12 per cent over the past year.
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Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on ANTM at https://www.zacks.com/ap/ANTM
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Keywords: Anthem, Earnings Report
