IBJNews

WellPoint profit falls but exceeds Wall Street expectations

Back to TopCommentsE-mailPrintBookmark and Share

Second-quarter profit fell 3 percent at WellPoint Inc. but exceeded analysts expectations, leading the health insurer to raise its forecast for the rest of the year.

Indianapolis-based WellPoint earned $702 million, or $1.89 per share, in the three months ended June 30. In the same period last year, the company earned $722 million, or $1.71 per share.

The rise in per-share profit stems from WellPoint aggressively buying its own shares, reducing the total number of them floating in the market.

Excluding investment gains, which totaled 6 cents per share in the quarter, WellPoint would have earned $1.83 per share. On that basis, Wall Street analysts were expecting $1.80 per share, according to a survey by Thomson Reuters.

Despite exceeding expectations, the company's stock fell more than 5 percent Wednesday, falling $3.93 per share to $69.63.

Revenue in the quarter grew nearly 5 percent, to $15.1 billion, also exceeding analysts' predictions of $14.7 billion.

"Our second-quarter results exceeded our forecast and reflected the significant administrative cost savings we have been able to achieve through our continuous improvement and efficiency initiatives,” WellPoint CEO Angela Braly said in a prepared statement. “This focus on execution has enabled us to exceed our goals through the first six months of the year.”

WellPoint’s selling and administrative costs dropped to 13.5 percent of revenue in the quarter, from 15.2 percent in the second quarter last year

But WellPoint also reported a lot more in claims, spending an unusually high 85.7 percent of premiums on claims, up from 82.9 percent in the same period last year. WellPoint now expects its claims expenses to exceed 85 percent for the entire year.

However, WellPoint expects per-share profit to keep rising. Excluding investment gains, the company expects to earn between a range of $6.75 and $6.95 per share. In April, WellPoint predicted it would earn at least $6.60 per share, excluding investment gains.

WellPoint’s share price has risen nearly 30 percent so far this year.

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. I keep wondering why I keep hearing about this problem of corporations leaving America, and I never hear a reasonable proposal to lower corporate tax rates and raise personal rates on income from capital gains and dividends, especially for high earners. It is just too simple of a solution for Congress to embrace?

  2. Are you financially down and you need money to settle your dept,or you need money to start up a business or to invest on a huge business,we also offer Loans to individuals, Firms and cooperate bodies at low interest rate , loan terms determinant,Loan amount between the sum of $5,000.00 to $100,000,000.00. US Dollars And Euro. Loan for developing businesses a competitive edge/ business expansion. We Offer The Following Kinds Of Loans. Personal Loans (Secure and Unsecured) Business Loans (Secure and Unsecured) Consolidation Loan FIRST INFORMATIONS NEEDED ARE: BORROWER’S DATA’S INFORMATION,FILL AND RETURN FOR QUICK START UP PROCESS. Name:_________ Last Name:_________ Age:_________ Contact Address:_________ Country:_________ Amount Needed as Loan:_________ Loan Duration:_________ Phone Number__________ Monthly Income/Yearly Income:_________ Purpose for Loan:_________ Occupation:_________ How Soon is Loan Needed__________ Email via: albertbrownfirm@outlook.com

  3. is a disaster. SR37 already needs to be built to interstate standards between 465 and SR144. Southport Road is a mess each morning and evening.

  4. Bass Pro Shops would be good for the mall as well as a Giant Eagle Market District or a Jungle Jim's International Market Place grocery store like the one near Cincinnati Ohio.A Disney quest indoor theme park would be good.An Academy outdoor store would be good too.Indoor Circus shows and magic shows would be good as well. A casino with sports bar would be good.A Disney theater inside that shows movies and Broadway shows would work.Nashville Tennessee concert shops with indoor neon lights would be good.How about a theater that shows travel shows and theme parks. A train store would be good.How about a giant toy store with high tech video games.

  5. This development is in addition to Allpoints Midwest 5, Aitrtek, a recent FedEx and more in Plainfield. Greenwood and Brownsburg also have similar projects.

ADVERTISEMENT