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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis-based Anthem Inc. topped Wall Street earnings expectations for the second quarter and raised its 2018 forecast, as acquisitions and another dip in medical expenses helped the Blue Cross-Blue Shield health insurer.
The nation's second-largest health insurer said Wednesday that it now expects full-year adjusted earnings of greater than $15.40 per share, after predicting more than $15.30 per share in April.
Analysts are forecasting adjusted earnings of $15.41 per share, according to FactSet.
In the second quarter, Anthem's biggest cost, medical expenses, slipped 1 percent, to $17.73 billion, after falling 3 percent year-over-year in the first quarter. That plus some acquisitions and enrollment gains in Anthem's Medicare business helped profit climb 23 percent, to $1.05 billion, in the second quarter.
Anthem's total enrollment fell 2 percent, to 39.5 million people, due to the insurer's pullback from the Affordable Care Act's public insurance exchanges and losses from its Medicaid business, which provides coverage for the poor and to people who have disabilities.
Excluding investment income, operating revenue rose 2 percent, to $22.71 billion, helped in part by premium hikes and the return this year of a health insurance tax.
The operating revenue amount slightly missed Street forecasts. Analysts surveyed by Zacks Investment Research expected $22.75 billion in the quarter.
But the insurer's adjusted earnings of $4.25 per share surpassed the average analyst expectation of $4.19.
Anthem sells coverage in several states, including big markets like New York and California. The company is the third major insurer so far to report Street-topping second-quarter earnings, following UnitedHealth Group Inc. and Centene Corp.
Anthem shares initially rose in morning trading Wednesday before falling to $241.32 each, almost 2 percent below Tuesday's closing price. Heading in to the day, the stock had increased slightly more than 9 percent since the beginning of the year and 29 percent in the last 12 months.
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