WellPoint Inc. beat expectations with its second-quarter profit and raised its full-year profit forecast, the company reported Wednesday morning.
But unlike its peers UnitedHealth Group and Aetna, the Indianapolis-based health insurer could not improve its profit over the same quarter last year.
Profit fell 8.6 percent in the quarter, to $731.1 million, down from $800.1 million in the same period last year.
Earnings per share were $2.56 in this year’s second quarter, compared with $2.81 in the same quarter last year.
Excluding investment gains and other special items, WellPoint earned $2.44 per share. On that basis, Wall Street analysts were expecting earnings of $2.26 per share, according to a survey by Thomson Reuters.
"We are encouraged by our progress in 2014 and optimistic about our future growth opportunities across our Commercial and Government segments." said WellPoint CEO Joe Swedish, in a prepared statement.
WellPoint raised its full-year profit forecast by 10 cents per share, saying it now expects to earn more than $8.60 per share.
The company also expects 100,000 more people to be enrolled in its health plans by year’s end—a range of 37.05 million to 37.15 million—compared with the forecast it issued on April 30.
WellPoint added 328,000 new members to its plans. New money from Obamacare helped boost its Medicaid enrollment by 373,000 and its individual enrollment by 207,000, compared with the same quarter last year, although enrollment in its Medicare plans fell by 51,000.
Employer health plans also enrolled more people, as the economy improved. But a larger mix of that business shifted from fully insured, in which WellPoint’s profit is higher, to self-funded.
evenue rose 4.4 percent in the second quarter, to nearly $18.5 billion. Analysts were expecting $18.2 billion in revenue, according to Thomson Reuters.
While the country's health care overhaul gave insurers more customers through a coverage expansion that started this year, it also heaped additional costs on their balance sheets, including an industry-wide tax that is non-deductible. It also trims funding for Medicare Advantage plans, changes how insurers can write their coverage and adds an industry-wide tax, which is not deductible.
Total expenses increased to $17.21 billion from $16.48 billion. The company's selling, general and administrative expense ratio was 15.8 percent, an increase of 190 basis points compared with the same period last year. The company cited changes in health care laws that went into effect at the beginning of the year.
Shares of WellPoint Inc. dropped $2.81, or 2.5 percent, to $109.74 in morning trading after rising as high as $116.50 earlier in the session.