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WellPoint reaffirms 2012 earnings forecast

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WellPoint Inc. is sticking with a 2012 earnings forecast that it had cut in July, and the nation's second-largest health insurer said it expects next year's earnings to be on par with this year's performance.

The Indianapolis company on Tuesday reaffirmed its forecast for 2012 adjusted earnings of $7.30 to $7.40 per share, which doesn't count investment gains and litigation or acquisition costs. That means the forecast doesn't count costs tied to its acquisition of fellow insurer Amerigroup Corp., a $4.46 billion deal WellPoint expects to close later this month.

Analysts expect, on average, earnings of $7.46 per share, according to FactSet.

WellPoint said July 25 it was cutting its outlook from a previous forecast of $7.57 per share after enduring a tough month of May and seeing enrollment slip. The insurer also reported that day second-quarter earnings that both fell and missed expectations.

CEO Angela Braly then resigned in August as investor frustration started to surface over the performance of the insurer, which runs Blue Cross Blue Shield plans in 14 states and trails only UnitedHealth Group Inc. in size.

WellPoint then trumped Wall Street expectations in the third quarter, when the insurer recorded its first quarterly, year over year, increase in earnings since early 2011.

WellPoint said Tuesday it expects 2013 earnings to be "relatively stable" with 2012. The insurer has said it will focus next year on preparing for 2014, when the health care overhaul will expand coverage and provide subsidies or tax credits to help people buy insurance. WellPoint plans to spend as much as $300 million next year to prepare for those expansions.

The company will release a specific earnings forecast for the new year in early 2013.

WellPoint's shares climbed 57 cents, to $58.78 each, Tuesday afternoon, while broader trading indexes rose less than 1 percent. WellPoint shares have slipped about 11 percent so far in 2012.

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  1. As a St. Vincent employee of over 20 years, I am saddened and disheartened by this announcement. Unfortunately, as the healthcare "industry" continues on this political and corporate path, all that St. Vincent Hospital has stood for spiritually for its employees and this community is being sucked dry. I know it truly has no choice. It is not just Obamacare or just competition or just any single thing. This trend started long before I was even born when the government became involved in healthcare and it became an "industry." I grieve for those who will lose their jobs, one of whom may be me, but I also grieve for this hospital which I have served for over 20 years. May God give us and it the grace to withstand the future of healthcare.

  2. Why do people constantly harp on this issue and act ignorant about what a city population measures? A city's population is the city's population. There is no argument or debate about it. If you want to measure the density of a city--measure it. If you want to measure the size of a metropolitan area, then measure the metropolitan population. City boundaries cover different sized areas--and they always have (though the disparity has probably increased since about 1900 or so when more cities began annexing their surrounding communities). For example, San Francisco only covers 49 square miles while Houston cover nearly 600 square miles. No one argues about the population rankings of either city even though they clearly cover extremely different sized areas. Indianapolis is the 13 largest city by population in the U.S. That is a fact. While the population of a metropolitan area may give you a better sense of how large a community is, as noted, even metro areas can vary widely in the size of geographic area they cover--so that is not a perfect comparison either.

  3. If Whole Foods went in, I doubt the Nora one would stay open, and with all those customers coming to Broad Ripple traffic would be horrible, and forget about a run to the grocery on weekend nights. I think concern over the number of apartments is misplaced, but the 400 space parking garage has me concerned - someone needs to ask the developer just how much traffic they think this development is going to generate. I am not against more neighborhood residents, but heavy commercial traffic going in and out at that location sounds like a mess.

  4. I thought everyone was innocent until guilt was proven. Seems people have already convicted Reggie in the press. My nephew was a good kid and is a good man, more to this story im sure

  5. Going by the Marion County population only is of little use. 13th largest? No Way! To judge the real size of a metro area, the easy way is to look at the Arbitron rating list. Indianapolis hovers around 40th largest in the nation--sometimes more, sometimes less. Advertisers want to know exactly how large the population is before they buy radio advertising. Arbitron figured it out long ago. Indianapolis is estimated at 1,427,500. The real #13 is Seattle-Tacoma with a metro population of 3,470,400. So, the population of just Marion County is completely irrelevant to anything useful as far as metro area planning.

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