UPDATE: WellPoint stock slides despite strong profits

Shares of WellPoint Inc. tumbled in pre-market trading even after the Indianapolis health benefits firm reported strong first-quarter growth.

The stock fell 4.7 percent before markets opened today and was trading at $78.35 as of 9:15 a.m.

One concern was a rise in WellPoint’s benefit expense ratio, or the amount of claims it pays relative to premium income it collects. The ratio climbed to 83.1 percent from 81.3 percent during the first quarter last year.

WellPoint reported that net income for the three months ended March 31 grew 7 percent to $783.1 million, or $1.26 per share. The $15.08 billion in revenue was up 9 percent from the same quarter a year ago.

Those numbers met expectations of Wall Street analysts, according to a survey by Thomson Financial. WellPoint raised its profit forecast, or guidance, for all of 2007 to $5.54 per share.

"We have seen industry-leading membership growth because WellPoint offers customers a unique combination of product breadth, flexibility and local market presence," said Angela F. Braly, who will succeed Larry C. Glasscock as president and chief executive officer of WellPoint Inc. on June 1.

WellPoint’s customer base, also called medical enrollment, grew to 34.9 million members, increasing by 774,000 members during the quarter.

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