UPDATE: Investors unfazed by WellPoint results

Shares of WellPoint Inc. were up slightly this morning, despite the company’s news that profit fell below expectations in the first quarter.

Profit at WellPoint Inc. fell below the company’s already lowered expectations in the first quarter and company officials for a second time lowered their profit forecast for the year.

The Indianapolis-based health insurer reported first-quarter profit of $1.07 per diluted share, which included six cents of investment losses. In the same period a year ago, WellPoint earned $1.26 per share.

In March, WellPoint had predicted it would earn at least $1.16 per share, which was down from an earlier projection of $1.44 cents per share. The company’s stock price dropped 28 percent in one day after the news.

WellPoint’s first quarter, which ended March 31, also badly missed analysts’ expectations. According to a poll by Thomson Financial, they expected WellPoint to earn $1.19 cents per share.

WellPoint stock was trading at $47.59 as of late morning, up 2.2 percent.

Again, a chief culprit was higher medical costs, WellPoint CEO Angela Braly said in a statement. WellPoint spent 85.1 percent of its premium revenue on paying claims, a spike of 2 percentage points from the same quarter a year ago.

In March, WellPoint said its full-year medical expense ratio could run as high as 83.1 for the year. But now WellPoint said that ratio will range from 83.3 percent to 83.6 percent.

“While the first quarter was challenging for WellPoint, since our March announcement we have further reduced claims inventories and achieved greater visibility into medical costs,” Braly said. “Our overall enrollment growth remains strong and we are now serving 35.4 million medical members, more than ever before.”

WellPoint added 564,000 customers during the first quarter.

The company earned $588.1 million on revenue of $15.6 billion. A year ago, WellPoint earned $783.1 million on revenue of $15.1 billion.

For all of 2008, WellPoint officers now expect profit to range from $5.42 to $5.67 per share.

This story will be updated.

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