Anthem Has Increased by ~13% Since 4Q14 Earnings Release
Preview for Investors: Anthem’s 1Q15 Earnings (Part 5 of 5)
Anthem rose 13%
Anthem (ANTM) is expected to release its first quarter 2015 earnings on April 29, 2015. Since the release of its fourth quarter 2014 earnings on January 28, 2015, the company’s shares have increased by about 13% from $133.6 to $151.0. The S&P 500 Index has increased by about 3% in that period.
Anthem witnessed a sudden spike in its share price after the company declared the completion of the Simply Healthcare acquisition on February 18. The acquisition has made Anthem the second largest Medicaid provider in Florida by adding 166,000 Medicaid members to the company’s portfolio. Simply Healthcare has a strong presence in southern Florida, which complements Anthem’s Medicaid market in middle Florida.
The acquisition, which is not expected to affect Anthem’s EPS (earnings per share) in 2015, will benefit the company beginning in 2016. Simply Healthcare has a strong provider network in Florida and has also entered into shared risk payment arrangements with these health care providers. These payment structures are expected to improve care coordination and reduce costs for Anthem. Based on these synergies, the market reacted positively to the acquisition, which was reflected in the company’s share prices.
Wall Street analyst estimates
Anthem’s revenue is estimated to be $19.3 billion, and its EBITDA (earnings before interest, tax, depreciation, and amortization) margin is expected to be about 7.7%. Its net income is expected to be around $731.7 million. Anthem’s EPS (earnings per share) is estimated to be around $2.66.
Market Realist will provide a follow-up report on Anthem after its earnings are released on April 29. We’ll also cover the earnings reports for other health insurance companies (XLV) such as Aetna (AET), Humana (HUM), and Cigna (CI) when they release their 1Q15 earnings on April 28, April 29, and April 30, respectively.
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