Anthem Inc.’s second-quarter profit surged past analysts’ expectations as the Indianapolis-based health insurer held on to more of its health plan members.
Anthem reported Wednesday morning that it earned $859.1 million during the three months ended June 30, an increase of 17.5 percent over the same quarter of 2014.
The quarterly report comes just days after Anthem announced a $54.2 billion commitment to buy Connecticut-based Cigna Corp. in a deal that would give Anthem an industry-leading 53 million health plan members. The acquisition is expected to close in the second half of 2016.
Excluding investment gains of three cents per share, Anthem’s profit totaled $3.10 per share. That easily beat the predictions of Wall Street analysts, who expected profit of $2.75 per share, based on a survey by Thomson Reuters.
On Friday, when Anthem announced it would acquire Cigna, it also raised its profit forecasts, saying it expected to earn $3.10 per share in the second quarter and more than $10 per share for the entire year.
“Second quarter results reflect contributions from both our commercial and government businesses, and we believe the growing diversity of our business model better serves our customers," Anthem CEO Joe Swedish said in a written statement Wednesday morning.
Anthem held on to 38.5 million health plan members in the period, just 10,000 fewer than it had at the end of the first quarter. Typically, Anthem sees its health plan membership jump at the beginning of each year and then dwindle slightly as the year goes on.
That decrease played out again this year among the individuals and employers Anthem serves, But those losses were offset by growing membership in the Medicaid plans Anthem manages for state governments.
Now, Anthem expects its health plan membership to end the year in a range of 38.25 million to 38.45 million—an estimate that is 50,000 higher than the forecast Anthem gave in April.
Holding onto more customers helped boost Anthem’s quarterly revenue by 8 percent, to $20 billion. Analysts were expecting revenue of $19.6 billion, according to Thomson Reuters.
Anthem's earnings report was released before the oepning of U.S. stock markets Wednesday. Shares closed Tuesday at $154.20, up 1.8 percent on the day.