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Dec 31, 2020
Elevance Health Q4 2020 Earnings Report
Anthem reported strong Q4 2020 results, demonstrating growth across all businesses despite pandemic uncertainties.
Key Takeaways
Anthem, Inc. reported a solid fourth quarter in 2020, marked by a 16.2% increase in operating revenue to $31.5 billion, driven by growth in Medicaid and Medicare, as well as pharmacy product revenue and the return of the health insurance tax. GAAP net income per share was $2.19, with an adjusted net income per share of $2.54. Medical enrollment reached 42.9 million members, a 4.7% increase year-over-year.
Operating revenue increased by 16.2% to $31.5 billion, driven by growth in Medicaid and Medicare, pharmacy product revenue, and the return of the health insurance tax.
GAAP net income was $2.19 per share, and adjusted net income was $2.54 per share.
Medical enrollment totaled approximately 42.9 million members, an increase of 4.7% from the prior year.
Operating cash flow was $3.8 billion, an increase of $2.5 billion compared to the prior year quarter.
Elevance Health
Elevance Health
Forward Guidance
Anthem anticipates GAAP net income to exceed $23.51 per share for the full year 2021, which includes approximately $0.99 per share of net unfavorable items. Adjusted net income is expected to be greater than $24.50 per share. Medical membership is projected to be in the range of 44.1 to 44.7 million, and operating revenue is expected to be approximately $135.1 billion.
Positive Outlook
- GAAP net income is expected to be greater than $23.51 per share.
- Adjusted net income is expected to be greater than $24.50 per share.
- Medical membership is expected to be in the range of 44.1 - 44.7 million.
- Operating revenue is expected to be approximately $135.1 billion.
- Operating cash flow is expected to be greater than $5.7 billion.
Challenges Ahead
- Adjusted net income guidance includes a net negative headwind of $0.50-$0.70 due to the Consolidated Appropriations Act and COVID-19 related impacts on the Medicare business.
- Benefit expense ratio is expected to be in the range of 88.0% plus or minus 50 basis points.
- SG&A ratio is expected to be 10.8% plus or minus 50 basis points.
- Interest expense is expected to be $785 million.
- Effective tax rate is expected to be between 20.0 - 22.0%.