Regional Blue Cross insurance company Anthem ( ATH) posted a 47% increase in second-quarter net income on strong membership growth.

The company, which acquired Trigon Healthcare ( TGH) on July 31, earned $106.2 million, or $1.01 a share, in the quarter, up from $72.4 million, or 70 cents a share, a year ago. Excluding nonrecurring gains and losses, Anthem earned 99 cents a share, a penny better than the consensus analyst estimate of 98 cents provided by Thomson Financial/First Call.

Operating revenue was up 13% to $2.8 billion on membership growth across each business segment. Total membership rose to 8.3 million, up 7% from the year ago quarter, with retention rates of around 90%. Anthem also said its benefit expense ratio improved 160 basis points to 83.6% due to lower medical costs trends.

Recently absorbed Trigon posted earnings of 80 cents a share, up from 71 cents a year ago. Excluding charges, the company earned $1.29 a share, easily beating estimates of $1.19 a share. Total revenue was up 15%, while enrollment increased 6%. Trigon's results will be included with Anthem's after Aug. 1, 2002.

Looking ahead, Anthem expects to earn $3.90 to $4 on a standalone basis, up from a previous forecast of $3.85 to $3.95. The Trigon acquisition is expected to reduce earnings by 5 cents a share for the year.

Shares of Anthem closed at $66.70 before the news Friday.

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