Insurer Anthem underwhelms Street with 2022 forecast

Jan 26, 2022, 6:20 AM | Updated: 9:10 am

Anthem is starting 2022 with lower expectations than Wall Street for how the year will play out.

The Blue Cross-Blue Shield health insurer laid out on Wednesday earnings, revenue and enrollment projections that all fell short of average analyst expectations, and its stock slipped while broader indexes rallied.

The health insurer expects enrollment to grow, especially in Medicare Advantage, the privately run version of the federal government’s coverage program. But it also anticipates some increased costs at least initially as the new customers start using their coverage.

Anthem said it expects this year that adjusted earnings will be greater than $28.25 per share on $152 billion in operating revenue, which excludes investment income.

The insurer also sees total enrollment ending up at somewhere between 45.6 million and 46.2 million people for the year after ending 2021 with about 45.4 million.

For next year, analysts expect, on average, earnings of $28.59 per share on $153 billion in revenue, with enrollment totaling about 46.8 million people, according to FactSet.

Most of Anthem’s customers have plans they bought on the individual insurance market or through employers. But the company’s government business, which includes Medicare Advantage and Medicaid programs it manages for states, grew 17% to more than 15 million people in 2021.

In the fourth quarter, Anthem also missed the consensus expectation by about $500 million with operating revenue of $36.02 billion.

The insurer’s adjusted earnings of $5.14 per share in the quarter, beat expectations by 3 cents while Anthem’s profit doubled to $1.14 billion.

For the full year, Anthem earned $6.1 billion on $136.94 billion in operating revenue.

Shares of Indianapolis-based Anthem Inc. fell more than 1%, or $6.17, to $433.01 Wednesday morning while the S&P 500 index advanced more than 1%.

Anthem shares have climbed about 40% over the past year.

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Insurer Anthem underwhelms Street with 2022 forecast