Anthem Inc (NYSE:ANTM) Q2 2019 Earnings Conference Call Transcript

Jul 24, 2019 • 08:30 am ET

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Anthem Inc (NYSE:ANTM) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Anthem's Second Quarter Results Conference Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the conference over to the Company's management.

Executive
Chris Rigg

Good morning, and welcome to Anthem's second quarter 2019 earnings call. This is Chris Rigg, Vice President of Investor Relations. And with us this morning are Gail Boudreaux, President and CEO; John Gallina, our CFO; Pete Haytaian, President of our Commercial & Specialty Business Division; and Felicia Norwood, President of our Government Business Division.

Gail will begin the call by giving an overview of our second quarter financial results, followed by comments on our key business initiatives and enterprise-wide growth priorities. John will then discuss our key financial metrics in greater detail and go over our updated 2019 outlook. We will then be available for Q&A.

During the call, we will reference certain non-GAAP measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are available on our website antheminc.com.

We will also be making some forward-looking statements on this call. Listeners are cautioned that these statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of Anthem. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to carefully review the risk factors discussed in today's press release and in our quarterly filings with the SEC.

I will now turn the call over to Gail.

Executive
Gail K. Boudreaux

Good morning, and thank you for joining us for Anthem's second quarter earnings call. Today we reported second quarter results that were ahead of expectations. During the quarter, we generated GAAP earnings per share of $4.36 and adjusted earnings per share of $4.64. Our second quarter performance reflects improved execution across the enterprise and the strength of our diversified platform. Based on the strong first half of 2019 results and confidence in the remainder of the year, we have increased our full-year GAAP net income guidance to greater than $18.34 per share and adjusted earnings per share guidance to greater than $19.30 per share, an increase of $0.10 from our prior guidance.

Our total medical membership at the end of the quarter was 40.9 million, an increase of 1.3 million consumer served compared to the second quarter of 2018, membership growth was broad based with continued strong performance in our Government business and substantial improvement in our risk-based group Commercial Business. Overall, risk-based membership represents more than 85% of our total growth.

At Investor Day, we committed to multi-year growth across all business segments driven in part by our improved pharmacy cost position through IngenioRx . As you know, we accelerated the launch in Ingenio and successfully began migrating members on May 1st.

At this time we received transition approvals from all 14 Commercial states and a majority of our Medicaid states. As a result of our accelerated progress we now see the