Anthem Shares Hit Record High After Earnings Beat and Big Announcement

08:57 02/03/2019

Insurance company Anthem was headed higher after reporting its earnings report for the fourth quarter.

The Indianapolis-based company reported adjusted net income of $644 million, or $2.44 a share, vs. $339 million, or $1.29 a share, compared to the year ago period. Analysts had been waiting for $2.20 a share for earnings.

The stock soared over 12% to hit a new intra-day high of $305.99 after the earnings report and after Wall Street learned that the company is planning to roll out its new pharmacy benefits management unit IngenioRx sooner than expected.

"Since announcing our intent to create IngenioRx, we have been carefully planning the transition, including the possibility of an early launch, and are confident in our ability to execute the transition under the accelerated schedule," CEO Gail Boudreaux said in a statement.

"This will allow us to go to market with better economics earlier, and also accelerate our whole person health strategy, which is proven to reduce total cost of care."

"IngenioRx will improve our ability to integrate pharmacy benefits within our already strong medical and specialty platform driving greater value for the consumer and increasing transparency," said Boudreaux.

She added, "To date we have completed more than 15 months of preparation against our transition goal. The results of our operational testing have been very positive giving us confidence in our readiness to launch."

According to the company, once the transition to IngenioRx is completed next year, Anthem will see an estimated roughly $4 billion in annual savings. Executives have also promised to return at least 20 percent of those savings to shareholders.

"Our customers will see value upon conversion to the new platform, so we think that there's a significant opportunity to drive meaningful value for them in terms of affordability as well as the member and consumer experience," Boudreaux explained.

The company is expecting adjusted earnings in the new year to be "greater than $19 per share." The average analyst forecast is just $17.61.

This article has been provided by a Chasing Markets contributor. All content submitted by this author represent their personal opinions, and should be considered as such for entertainment purpose only. All opinions expressed are those of the writer, and may not necessarily represent fact, opinions, or bias of Chasing Markets.
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