Anthem (ANTM) Gears Up For Q3 Earnings: What's In Store?
Zacks Investment Research | Oct 20, 2019 11:15PM ET
Anthem Inc. (NYSE:ANTM) will release third-quarter 2019 results on Oct 23 before market open.
The Zacks Consensus Estimate for the to-be-reported quarter’s earnings is pegged at $4.84, suggesting a 27% rise from the year-ago reported figure.
In the last reported quarter, the company delivered earnings of $4.64 per share, marginally beating the Zacks Consensus Estimate by 0.7%. Additionally, the bottom line improved 9.2% year over year on the back of higher revenues.
Let’s see how things are shaping up prior to the announcement.
The company’s revenues are likely to have gained from its superior performing Government business segment. The Zacks Consensus Estimate for second-quarter revenues stands at $25.4 billion, implying a 10.6% increase from the prior-year reported number.
The consensus mark for revenues in the Government business indicates an 11.3% improvement from the year-earlier reported figure. However, the company’s commercial business segment might have witnessed a dip in revenues. The consensus estimate for the same hints at a slip of 0.4%.
Membership across its government segment is expected to have strengthened in the same time frame.
Total medical membership for the quarter to be reported is likely to have improved in the third quarter. The Zacks Consensus Estimate for medical enrollment implies 3.6% growth from the year-ago reported figure.
Moreover, Anthem is likely to have benefited from a steady cash flow in the third quarter of 2019.
The company is expected to have incurred an elevated level of selling, general and administrative expenses due to growth-related investments.
Key Developments in Q3
Anthem will be purchasing WellCare Health Plans, Inc.’s Missouri and Nebraska Medicaid plans. This move is related to the $17-billion worth pending merger of Centene (NYSE:CNC) Corporation and WellCare, which is expected to be completed in the first half of 2020. Subject to certain closing conditions, this deal will help Anthem gain around 300000 Medicaid members.
What the Quantitative Model States
Our proven model does not conclusively predict an earnings beat for Anthem this season. The combination of a positive Zacks Investment Research
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