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. Really, taking someone managing the regulation of Alcohol and making himthe President of an IVY Tech regional campus. Does he have an education background?

  2. Jan, great rant. Now how about you review the report and offer rebuttal of the memo. This might be more conducive to civil discourse than a wild rant with no supporting facts. Perhaps some links to support your assertions would be helpful

  3. I've lived in Indianapolis my whole and been to the track 3 times. Once for a Brickyard, once last year on a practice day for Indy 500, and once when I was a high school student to pick up trash for community service. In the past 11 years, I would say while the IMS is a great venue, there are some upgrades that would show that it's changing with the times, just like the city is. First, take out the bleachers and put in individual seats. Kentucky Motor Speedway has individual seats and they look cool. Fix up the restrooms. Add wi-fi. Like others have suggested, look at bringing in concerts leading up to events. Don't just stick with the country music genre. Pop music would work well too I believe. This will attract more young celebrities to the Indy 500 like the kind that go to the Kentucky Derby. Work with Indy Go to increase the frequency of the bus route to the track during high end events. That way people have other options than worrying about where to park and paying for parking. Then after all of this, look at getting night lights. I think the aforementioned strategies are more necessary than night racing at this point in time.

  4. Talking about congestion ANYWHERE in Indianapolis is absolutely laughable. Sure you may have to wait in 5 minutes of traffic to travel down BR avenue during *peak* times. But that is absolutely nothing compared to actual big cities. Indy is way too suburban to have actual congestion problems. So please, never bring up "congestion" as an excuse to avoid development in Indianapolis. If anything, we could use a little more.

  5. Oh wait. Never mind.

ADVERTISEMENT