Anthem Is Still Committed to WellPoint
Anthem Inc. on Wednesday reaffirmed its commitment to acquiring WellPoint Health Networks Inc. despite delays caused by California regulators.
California Insurance Commissioner John Garamendi blocked part of the deal in July on grounds that it would cost health insurance policyholders $4 billion, prompting Anthem to sue Garamendi in a bid to reverse his stance.
Larry Glasscock, Anthem’s chief executive, said in a conference call with analysts that in addition to the lawsuit his company continued “to evaluate all options available to us to complete this transaction.”
The Indianapolis-based health insurer also reported a 23% jump in third-quarter profit partly because of enrollment gains and raised its profit forecast for 2004.
Wednesday marked the one-year anniversary of Anthem’s announcement of plans to acquire Thousand Oaks-based WellPoint, which if completed would create the nation’s largest health insurer.
Anthem has spent $18.6 million on costs related to the deal as of Sept. 30, according to a Securities and Exchange Commission filing. The costs will be expensed if the company is unable to complete the acquisition.
Glasscock also addressed a subpoena Anthem received from Connecticut Atty. Gen. Richard Blumenthal on Monday seeking information about the company’s commissions and bonuses. He said he was not surprised by the subpoena because Anthem is a major insurer in the state.
“The allegations regarding bid rigging and other improper bidding activities are not practices at Anthem,” Glasscock said. “We have not been asked by brokers to make false or inflated bids.”
Anthem reported third-quarter earnings of $242.1 million, or $1.70 a share, compared with $196.5 million, or $1.38, a year earlier.
Excluding a net realized gain of 3 cents a share from investment income, Anthem earned $1.67 a share. On that basis, analysts had forecast a per-share profit of $1.65, according to Thomson First Call. Revenue rose nearly 13% to $4.8 billion from $4.26 billion.
Anthem raised its full-year profit forecast to a range of $7.05 to $7.10 a share from $6.95 to $7.05 and said it expected per-share earnings of at least $7.60 in 2005.
The company’s shares rose $4.28 on Wednesday to $81.12 on the New York Stock Exchange.
