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WellPoint's third-quarter profits beat expectations

October 28, 2009

WellPoint Inc.’s third-quarter profits fell 11 percent, the company reported this morning, but still soared above analysts’ expectations.

WellPoint earned $1.53 per share, even after taking a 28-cent-per-share charge to write down the value of some assets. WellPoint also had 3 cents of investment gains during the quarter, which ended Sept. 30.

The Indianapolis-based health insurance giant's profit from the quarter totaled $730.2 million, down 11 percent from $820.7 million, or $1.60 per share, in the same period a year ago.

Wall Street analysts were expecting earnings of $1.38 per share, according to a survey by Thomson Reuters.

Revenue for the third quarter was $15.21 billion, down slightly but also slightly above analysts’ expectations of $15.15 billion.

In spite of beating analysts’ expectations and receiving some investment gains in the third quarter, WellPoint did not change its year-end profit forecast of $5.06 to $5.12 per share.

WellPoint CEO Angela Braly, in a statement, said the company is seeing higher medical usage due to a busier flu season and high numbers of unemployed workers using their COBRA insurance benefits.

“We are performing well as an organization in a difficult economic environment,” she said.

WellPoint lost 366,000 members in its health plans during the quarter. Its total customer base has shrunk by 4 percent in the past year.

WellPoint wrote down the value of its pharmacy benefits assets, which it has agreed to sell to St. Louis-based Express Scripts Inc. Also, it wrote down the value of its UniCare subsidiary because of expected membership declines next year.

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