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WellPoint boosts third-quarter profit, raises forecast

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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.

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  • No Surprise
    This is no surprise as we our rates are going up 15% even though our premium to loss ratio is within guidelines that they set.. Health insurance companies should not be for profit- no shareholders.. it is all about the bottom line..
  • thanks, Wellpoint
    Of course, they're making record profits by screwing over their customers. Our small business has Anthem as the health insurance provider. Even with an HSA plan, we just learned that Anthem intends to raise our premiums 35% for next year - gee, thanks, Wellpoint for sticking it to businesses who are already struggling to survive!

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  1. to mention the rest of Molly's experience- she served as Communications Director for the Indianapolis Department of Public Works and also did communications for the state. She's incredibly qualified for this role and has a real love for Indianapolis and Indiana. Best of luck to her!

  2. Shall we not demand the same scrutiny for law schools, med schools, heaven forbid, business schools, etc.? How many law school grads are servers? How many business start ups fail and how many business grads get low paying jobs because there are so few high paying positions available? Why does our legislature continue to demean public schools and give taxpayer dollars to charters and private schools, ($171 million last year), rather than investing in our community schools? We are on a course of disaster regarding our public school attitudes unless we change our thinking in a short time.

  3. I agree with the other reader's comment about the chunky tomato soup. I found myself wanting a breadstick to dip into it. It tasted more like a marinara sauce; I couldn't eat it as a soup. In general, I liked the place... but doubt that I'll frequent it once the novelty wears off.

  4. The Indiana toll road used to have some of the cleanest bathrooms you could find on the road. After the lease they went downhill quickly. While not the grossest you'll see, they hover a bit below average. Am not sure if this is indicative of the entire deal or merely a portion of it. But the goals of anyone taking over the lease will always be at odds. The fewer repairs they make, the more money they earn since they have a virtual monopoly on travel from Cleveland to Chicago. So they only comply to satisfy the rules. It's hard to hand public works over to private enterprise. The incentives are misaligned. In true competition, you'd have multiple roads, each build by different companies motivated to make theirs more attractive. Working to attract customers is very different than working to maximize profit on people who have no choice but to choose your road. Of course, we all know two roads would be even more ridiculous.

  5. The State is in a perfect position. The consortium overpaid for leasing the toll road. Good for the State. The money they paid is being used across the State to upgrade roads and bridges and employ people at at time most of the country is scrambling to fund basic repairs. Good for the State. Indiana taxpayers are no longer subsidizing the toll roads to the tune of millions a year as we had for the last 20 years because the legislature did not have the guts to raise tolls. Good for the State. If the consortium fails, they either find another operator, acceptable to the State, to buy them out or the road gets turned back over to the State and we keep the Billions. Good for the State. Pat Bauer is no longer the Majority or Minority Leader of the House. Good for the State. Anyway you look at this, the State received billions of dollars for an assett the taxpayers were subsidizing, the State does not have to pay to maintain the road for 70 years. I am having trouble seeing the downside.

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