Third-quarter profits rose slightly at WellPoint Inc. but soared above Wall Street expectations.
The Indianapolis-based health insurer raised its full-year profit forecast by 20 cents per share, excluding investment gains, to $6.45 per share.
WellPoint earned $739 million during the three months ended Sept. 30, a 1 percent gain over the same quarter a year ago. The profits were driven by lower-than-expected claims expenses and lower administrative costs.
Profits per share totaled $1.84. But excluding investment gains of 10 cents, the company would have earned $1.74 per share, a slight decrease from the $1.78 per share it earned a year ago.
Still, the performance soared above analysts’ consensus forecasts of $1.57 per share, according to a survey by Thomson Reuters.
Quarterly revenue of $14.6 billion also edged analysts’ expectations, even though it fell 5 percent from the same quarter last year.
"We are pleased with our third-quarter performance, which exceeded our forecast primarily due to higher than anticipated favorable reserve development and disciplined administrative expense control. Membership was stable in the quarter, and we continued to grow our Blue-branded businesses," CEO Angela Braly said in a statement.
WellPoint had 33.5 million members in its health plans as of Sept. 30, unchanged from June 30, but down by 382,000 members from this time last year. Unemployment has hurt WellPoint’s membership totals in the past two years.
The company’s percentage of revenue spent on overhead fell to 14.6 percent in the quarter, compared with 14.9 percent a year ago.
For all of 2010, WellPoint now expects to earn $6.60 per share, including 18 cents of investment gains. The company also recorded an accounting charge of 3 cents per share.
WellPoint’s shares closed Tuesday at $55.75 apiece. The stock price has rallied in the past two months by more than 12 percent, but are still down 4.4 percent for the year.