UPDATE 2-Anthem profit beats on lower medical costs due to deferred care

(Adds shares, analyst comment)

July 29 (Reuters) - Anthem Inc reported better-than-expected quarterly profit on Wednesday, aided by lower medical costs as people delayed non-essential procedures owing to the coronavirus induced shelter-in-place restrictions across the country.

The pandemic, which has killed nearly 148,500 and infected more than 4 million Americans, slowed U.S. medical procedures throughout the spring.

Patients began returning to doctors in June, except for in some regions where a new wave of coronavirus cases slowed healthcare services once again, rival UnitedHealth Group Inc said earlier this month.

Anthem maintained its full-year adjusted profit target and did not provide targets for other financial metrics, citing uncertainty around the impact from the pandemic.

“When comparing Anthem’s record financial performance in the first half of 2020 with a stock price that has underperformed peers so far this year, it is fair to say that investors have built in a highly pessimistic base case scenario for future profits,” Stephens analyst Scott Fidel said.

Anthem continues to see adjusted profit of greater than $22.30 per share for 2020. In June, the company said it expected to generate about 70% of its adjusted earnings for the year in the first half.

Anthem slightly missed street estimates for second-quarter revenue, owing to weakness in sales of its high-margin health plans sponsored by employers, as job losses due to COVID-19 pushed more people into Medicaid or Obamacare health plans.

Membership in its commercial & specialty business declined by 290,000 from March 31. The government business, in contrast, grew by 599,000 subscribers.

Anthem’s benefit expense ratio, the share of premiums paid for medical services, improved to 77.9% from 86.7% a year earlier, primarily driven by the deferral of healthcare utilization.

Excluding items, Anthem reported a profit of $9.20 per share, beating estimates of $8.87 per share, according to Refinitiv IBES data. (Reporting by Manojna Maddipatla in Bengaluru; Editing by Shinjini Ganguli)