- Indianapolis-based Anthem this morning released its first quarter financials, which showed a net income of $703 million, compared to $865 million in the same quarter last year - a 19% decrease.
- The insurer's Q1 earnings per share were $2.63, compared to $3.09 per share in 2015 Q1. The company cited the cost of providing healthcare services, particularly for ACA and Medicaid patients, as a key reason for the drop.
- The company's operating revenue, on the other hand, increased by about $1.5 billion (7.7%) to $20.3 billion this year, compared to $18.9 billion in fiscal 2015 Q1.
There was good news in the bad news: Medical plan enrollments were up, which the company hopes will lead to increased profitability in the future. But enrollments that come through ACA often involve people who delayed healthcare needs because they were previously uninsured, making them expensive acquisitions at first.
"We remain firmly focused on advancing affordability and quality on behalf of our members, which will be enhanced by the pending Cigna acquisition," Anthem CEO Joseph Swedish said in a statement. Anthem announced last summer it would buy Cigna in a deal with a $54.2 billion value. The Department of Justice and state regulators still need to approve the merger.
As of March 31, the company's medical enrollment increased by 1 million members (2.6%) to a total of about 39.6 million. the company says its full-year 2016 net income is now expected to be greater than $9.65 per share, a decrease from $10.80 per share.
The Blue Cross and Blue Shield affiliate's projected earnings per share for the end of 2016 also depends on the outcome of its pending acquisition of Cigna.
Investors expressed their unhappiness Wednesday with Anthem's numbers, with the stock down more than 3% shortly after noon ET.
Here's what some industry insiders were saying in regards to Anthem's individual market presence:
Anthem had 975k individual public exchange #ACA members as of March 31. Increase of 184k from end of 2015, CEO Joe Swedish says.— Bob Herman (@MHbherman) April 27, 2016
*ANTHEM SAYS WELL POSITIONED FOR GROWTH IN ACA EXCHANGES— Zachary Tracer (@ZTracer) April 27, 2016