Investors cheered the last time Anthem (ELV -0.43%) announced its quarterly results, in July. The big health insurer delivered solid growth and beat Wall Street revenue and earnings estimates. 

Anthem announced its third-quarter results before the market opened on Wednesday. Investors once again had plenty of things to like. Here are the highlights from Anthem's Q3 update.

Woman handing a pen to a man to fill out his health insurance claims form

Image source: Getty Images.

By the numbers

Anthem announced Q3 revenue of $26.7 billion, a 14.7% increase from the $23.3 billion reported in the same quarter of the previous year. The company's reported revenue was also higher than the average analysts' revenue estimate of $25.9 billion.

The health insurer reported net income in the third quarter of $1.18 billion, or $4.55 per share, based on generally accepted accounting principles (GAAP). The company's bottom line reflected an impressive increase from the prior-year period GAAP net income of $960 million, or $3.62 per share.

Anthem's adjusted net income in the third quarter was $4.87 per share. This was a 28% jump from the company's net income of $3.81 per share in the prior-year period. It also beat the consensus analysts' adjusted earnings estimate of $4.82 per share.

Behind the numbers

There were three main factors driving Anthem's solid revenue growth: membership growth, higher premiums, and growth in ancillary businesses, including the company's pharmacy benefits management (PBM) unit.

Anthem's medical enrollment rose by nearly 3%, by 41 million members. In particular, growth in the company's fully insured business boosted total enrollment. Anthem's government business revenue jumped 14% year over year to more than $15.9 billion, thanks to strong growth in Medicare and Medicaid enrollment.

The bottom-line improvement stemmed in part from increased market penetration of Anthem's PBM and integrated health offerings. Anthem also benefited from lower Medicaid medical costs in the quarter. The company's earnings per share year-over-year comparisons were also helped by stock buybacks, including the repurchase of 2.4 million shares during the third quarter.

Looking ahead

Anthem now anticipates GAAP net income will be greater than $18.45 per share in full-year 2019, up from its previous guidance of greater than $18.34 per share. The company also projected adjusted net income will be greater than $19.40. Anthem's previous guidance called for full-year adjusted net income of greater than $19.30 per share.

CEO Gail Boudreaux stated that Anthem's Q3 growth in membership and operating revenue gives the company "great momentum as we head into 2020." However, 2020 is also a presidential election year in the U.S. Healthcare stocks like Anthem could be more volatile with several presidential candidates promoting single-payer healthcare reform that could hurt Anthem's business if eventually enacted into law.