IBJNews

WellPoint profit better than analyst estimates

Back to TopCommentsE-mailPrintBookmark and Share

WellPoint Inc.’s profit slipped in the fourth-quarter but easily beat the expectations of Wall Street.

The Indianapolis-based health insurer earned $548.8 million, or $1.40 per share, in the three months ended Dec. 31. In the same quarter of 2009, WellPoint reported profit of $2.7 billion—of which $2.2 billion came from the one-time sale of its pharmacy subsidiary, NextRx.

Excluding that sale and other one-time charges, WellPoint’s profit fell 2 percent to $524.7 million from $536 million in the fourth quarter of 2009.

On that same basis, WellPoint earned $1.33 per share in the fourth-quarter, up from $1.16 in the same quarter a year before. Wall Street analysts were expecting $1.22, according to a survey by Thomson Reuters.

WellPoint’s per-share profit increased sharply because the company has been buying back shares aggressively in the past year, reducing its common stock by nearly 15 percent.

Fourth-quarter revenue fell 23 percent to $14.65 billion absent the boost from the previous year's pharmacy sale. But even its operating revenue suffered, dropping 4 percent to $14.42 billion.

That still bested analysts’ average expectations of $14.27 billion.

For the year, WellPoint earned $2.9 billion in profit, or $6.94 per share, on revenue of $58.8 billion. The comapny expects 2011 profit to fall to $6.30 per share.

“We exceeded our goals in many areas of the company this year and provided a significant return of capital to our shareholders following the sale of NextRx," WellPoint CEO Angela Braly said in a prepared statement. “We also created a new strategy and implemented organizational changes that enhance our ability to provide affordable and valuable products to our customers and position us to be a long-run winner in the changing health care marketplace.”

WellPoint ended the year with 33.3 million people insured by its health plans, a drop of nearly 350,000 from a year ago. WellPoint’s insurance plan enrollment has been hurt by layoffs at its client companies.

However, in one encouraging development, the number of people covered by small- to mid-size employers, which WellPoint calls its local group, stopped sliding and actually increased in the fourth quarter by 45,000 people, to a total of 15.2 million.

WellPoint benefited from cost-conscious Americans deferring medical treatment, according to Bloomberg News, citing a trend that reduced expenses for all health insurers in the past two years. A slow start to the 2010-2011 flu season also led to lower use of care, the company said. The savings were limited because WellPoint was forced to accept lower rate increases than it proposed in California and the insurer’s commercial enrollment has declined, analyst Jason Gurda told Bloomberg.

“The whole managed-care group has been helped by low-cost trends, but WellPoint has benefited less than its peers” because of California and the falling enrollment, Gurda, an analyst with Boston-based Leerink Swann & Co., told Bloomberg before the results were released.

WellPoint shares rose 71 cents, or 1.2 percent, to $61.70 Tuesday in New York Stock Exchange composite trading. The stock has dropped 4.6 percent since President Barack Obama signed the health overhaul into law on March 30.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT