Investors yawned this morning after WellPoint Inc. reported slightly lower first-quarter profits that soared above analysts’ expectations.
In late-morning trading, WellPoint’s share price hovered near yesterday’s closing price of $41.76.
The Indianapolis-based health insurer earned $1.62 per share, excluding investment losses, in the three months ended March 31. That marked a 43-percent rise from the same period a year ago.
It also handily beat the lowered expectations of Wall Street analysts, who were looking for $1.25 per share, according to a survey by New York-based Thomson Financial.
However, WellPoint has nearly 44 million fewer shares outstanding, or 8-percent less, than it did a year ago. So the company’s total profits were 1-percent lower than a year ago, totaling $580 million in the quarter.
WellPoint suffered $228 million in after-tax investment losses, or 46 cents per share.
WellPoint raised the lower end of its 2009 profit forecast. Excluding investment losses, the company now expects to earn from $5.60 to $5.66 per share. In February, the company predicted it would earn $5.51 to $5.66 per share.
Sharply rising unemployment has been costing WellPoint customers.
WellPoint lost 490,000 customers in the quarter and now expects to lose more than 1 million for the entire year, slightly more than the company predicted in February. WellPoint currently provides health benefits for 34.6 million people.
WellPoint is losing customers rapidly among smaller employers it classifies as local groups. That segment lost 814,000 people over the past year.
But WellPoint’s national accounts, which typically cover multiple states, added 400,000 people in the last year.
On a conference call this morning, analysts questioned WellPoint executives about why they didn’t raise their profit forecast higher, given the strong quarter.
WellPoint CEO Angela Braly said the company took a cautious approach.
“Part of our cautiousness is that unemployment rates increased faster than expected in the first quarter,” she said.