How Anthem Fell Short on Earnings and Membership

By Chris Lange Updated Jan 13, 2:32PM EST · Published Jan 27, 9:15AM EST

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How Anthem Fell Short on Earnings and Membership — © Thinkstock

Anthem Inc. (NYSE: ANTM) released its fourth-quarter earnings report before the markets opened Wednesday. The company had $1.14 in earnings per share (EPS) on $20.02 billion in revenue, versus consensus estimates of $1.20 in EPS on $19.90 billion in revenue. The same period from the previous year had $1.73 in EPS on $18.78 billion in revenue.

Medical enrollment totaled approximately 38.6 million members at December 31, 2015, an increase of approximately 1.1 million members, or 2.9%, from 37.5 million at December 31, 2014. However, during the fourth quarter medical enrollment decreased by 102,000 members, or 0.3%, sequentially. The decrease reflected enrollment losses in the National and Individual businesses, partially offset by gains in the Medicaid business.

The company did not repurchase any shares of its common stock during the quarter due to the pending acquisition of Cigna.

During the fourth quarter of 2015, the Biogen paid a quarterly dividend of $0.625 per share, representing a distribution of cash totaling $163.1 million.

In terms of guidance, Biogen expects EPS to be greater than $10.35 in 2016, versus consensus estimates that call for $10.88 in EPS on $82.98 billion in revenue. Apart from this the company expects the following:

Medical membership is expected to be in the range of 38.8 million to 39.0 million.
Fully insured membership is expected to be in the range of 14.6 million to 14.7 million.
Self-funded membership is expected to be in the range of 24.2 million to 24.3 million.

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Joseph Swedish, chairman, president and CEO of Anthem, commented:

Our solid fourth quarter results reflected a continuation of our positive operating momentum as we ended the year serving 38.6 million members across our Commercial and Government markets. As we look ahead to 2016, we remain well-positioned to continue advancing affordability, quality and choice for our members. We believe our strategy will be enhanced with the pending acquisition of Cigna, which we continue to expect should close in the second half of 2016,

Shares of Anthem closed Tuesday down 0.7% at $175.94, with a consensus analyst price target of $175.94 and a 52-week trading range of $126.25 to $173.59.

About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.