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Anthem's (ANTM) Q4 Earnings Beat Estimates, Improve Y/Y

Anthem, Inc. ANTM delivered fourth-quarter 2021 earnings of $5.14 per share, which beat the Zacks Consensus Estimate of $5.11 by 0.6% owing to better revenues.

The bottom line also increased 102.4% year over year.

Anthem, Inc. Price, Consensus and EPS Surprise

Anthem, Inc. price-consensus-eps-surprise-chart | Anthem, Inc. Quote

Quarterly Operational Update

Anthem’s benefit expense ratio of 89.5% expanded 60 basis points (bps) from the prior-year quarter’s figure.

Operating revenues for the quarter grew 14.2% year over year.

The SG&A expense ratio of 11.7% contracted 200 bps from the year-ago quarter’s level on the back of repealing the health insurance tax in 2021 and better operating revenues.

Total expenses increased 12.7% year over year to $35.1 billion due to higher benefit expense, cost of products sold and amortization of other intangible assets.

Segmental Results

Commercial & Specialty Business

Operating revenues of $9.9 billion in the fourth quarter were up 7.4% year over year.

The segment reported an operating gain of $74 million, down 39.8% year over year. This downside was due to a spike in business optimization expenses in the fourth quarter of 2021and the effect of the BCBSA litigation settlement accrual adjustment in the fourth quarter of 2020.

Operating margin was 0.7%, down 60 bps from the year-ago quarter’s figure of 1.3%.

Government Business

Operating revenues were $21.9 billion, up 16.8% from the prior-year quarter’s reading.

Operating gain was $748 million, up 342.6% year over year owing to the impact of the timing of Medicaid rate actions along with membership growth in the Medicaid and Medicare businesses.

IngenioRx

Operating revenues from the segment were $6.8 million in fourth-quarter 2021, up 16% year over year. Operating gain in the segment rose 17.6% year over year on the back of growth in membership.

Other

Operating revenues of $2.6 billion soared 51.3% from the prior-year quarter’s level.

The Other segment’s loss of $61 million was wider than the year-ago quarter’s loss of $50 million.

Financial Update (as of Dec 31, 2021)

Anthem’s cash and cash equivalents totaled $4.8 billion, down 15% from the level at 2020 end.

Anthem’s long-term debt less current portion increased 9.4% to $21.1 billion from the level at 2020 end.

Cash provided by operating activities was $8.4 billion for 2021, down 21.7% year over year.

Capital Deployment

During the fourth quarter, Anthem bought back shares worth $522 million. As of Dec 31, 2021, ANTM had shares worth $4.2 billion remaining under its share buyback authorization.

Anthem paid out a quarterly dividend of $1.13 per share in the fourth quarter, adding up to a distribution of cash worth $274 million.

Guidance for 2022

Following the announcement of fourth-quarter results, Anthem raised its 2022 outlook.

Adjusted net income for the current year is projected to be more than $28.25 per share. Medical enrollment is expected to be in the range of 45.6-46.2 million.

Anthem anticipates its operating cash flow view to be more than $6.9 billion.

Operating revenues for the year are expected to be around $152 billion.

For the current year, investment income is expected to be $1.1 billion.

Zacks Rank

Anthem currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Here are some stocks worth considering from the medical sector with the perfect mix of elements to surpass estimates in their upcoming releases:

Community Health Systems, Inc. CYH has an Earnings ESP of +23.00% and a Zacks Rank #1, currently. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

bluebird bio BLUE has an Earnings ESP of +26.20% and is a #3 Ranked player, presently.

Bausch Health Cos Inc. BHC has an Earnings ESP of +3.24% and is Zacks #3 Ranked, presently.
 


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