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WellPoint reaffirms 2012 earnings forecast

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WellPoint Inc. is sticking with a 2012 earnings forecast that it had cut in July, and the nation's second-largest health insurer said it expects next year's earnings to be on par with this year's performance.

The Indianapolis company on Tuesday reaffirmed its forecast for 2012 adjusted earnings of $7.30 to $7.40 per share, which doesn't count investment gains and litigation or acquisition costs. That means the forecast doesn't count costs tied to its acquisition of fellow insurer Amerigroup Corp., a $4.46 billion deal WellPoint expects to close later this month.

Analysts expect, on average, earnings of $7.46 per share, according to FactSet.

WellPoint said July 25 it was cutting its outlook from a previous forecast of $7.57 per share after enduring a tough month of May and seeing enrollment slip. The insurer also reported that day second-quarter earnings that both fell and missed expectations.

CEO Angela Braly then resigned in August as investor frustration started to surface over the performance of the insurer, which runs Blue Cross Blue Shield plans in 14 states and trails only UnitedHealth Group Inc. in size.

WellPoint then trumped Wall Street expectations in the third quarter, when the insurer recorded its first quarterly, year over year, increase in earnings since early 2011.

WellPoint said Tuesday it expects 2013 earnings to be "relatively stable" with 2012. The insurer has said it will focus next year on preparing for 2014, when the health care overhaul will expand coverage and provide subsidies or tax credits to help people buy insurance. WellPoint plans to spend as much as $300 million next year to prepare for those expansions.

The company will release a specific earnings forecast for the new year in early 2013.

WellPoint's shares climbed 57 cents, to $58.78 each, Tuesday afternoon, while broader trading indexes rose less than 1 percent. WellPoint shares have slipped about 11 percent so far in 2012.

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  1. I took Bruce's comments to highlight a glaring issue when it comes to a state's image, and therefore its overall branding. An example is Michigan vs. Indiana. Michigan has done an excellent job of following through on its branding strategy around "Pure Michigan", even down to the detail of the rest stops. Since a state's branding is often targeted to visitors, it makes sense that rest stops, being that point of first impression, should be significant. It is clear that Indiana doesn't care as much about the impression it gives visitors even though our branding as the Crossroads of America does place importance on travel. Bruce's point is quite logical and accurate.

  2. I appreciated the article. I guess I have become so accustomed to making my "pit stops" at places where I can ALSO get gasoline and something hot to eat, that I hardly even notice public rest stops anymore. That said, I do concur with the rationale that our rest stops (if we are to have them at all) can and should be both fiscally-responsible AND designed to make a positive impression about our state.

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  4. Community Hospital is the only system to not have layoffs? That is not true. Because I was one of the people who was laid off from East. And all of the LPN's have been laid off. Just because their layoffs were not announced or done all together does not mean people did not lose their jobs. They cherry-picked people from departments one by one. But you add them all up and it's several hundred. And East has had a dramatic drop I in patient beds from 800 to around 125. I know because I worked there for 30 years.

  5. I have obtained my 6 gallon badge for my donation of A Positive blood. I'm sorry to hear that my donation was nothing but a profit center for the Indiana Blood Center.

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