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WellPoint earnings fall well short of analysts' expectations

January 25, 2012

WellPoint Inc.’s fourth-quarter profit met the company’s predictions but fell far below the expectations of Wall Street analysts.

The Indianapolis-based health insurer reported earnings of $335.3 million, or 96 cents per share, down 39 percent from the same quarter a year ago.

Excluding investment losses, WellPoint would have earned 99 cents per share in the quarter. On that basis, analysts were expecting $1.12 per share, according to a survey by Thomson Reuters.

For all of 2011, WellPoint earned $7.00 per share, excluding investment gains, a 3.9 percent increase over the previous year. But analysts were expecting even more—$7.10 per share.

WellPoint said it expects to earn $7.60 per share for all of 2012, again below analysts’ estimates.

“Our fourth quarter results were at the high end of our guidance range and concluded a successful 2011,” said Angela Braly, WellPoint’s CEO, in a prepared statement. WellPoint had previously predicted it would earn from 94 cents to $1.04, excluding investment gains, in the quarter.

Revenue in the fourth-quarter rose 5 percent, compared with the same quarter last year, to $15.3 billion. Wall Street analysts expected it to reach $15.4 billion.

WellPoint ended the year with 34.3 million members in its health insurance plans, down slightly from the third quarter of 2011. WellPoint covers more Americans than any other health insurer.

In 2012, WellPoint expects to lose roughly 600,000 health plan members.

WellPoint’s shares closed Tuesday at $69.40 apiece. Over the last 12 months, WellPoint’s shares have generated a return of 15.5 percent, including dividends.

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