WellPoint Profit Up 17% as Premiums Are Boosted
WellPoint Health Networks Inc., one of California’s biggest health insurers, said Monday that fourth-quarter earnings rose 17%, which was more than expected, as it boosted premiums and attracted new members.
Profit from operations rose to $78.8 million, or $1.20 a share, from net income of $67.4 million, or 99 cents, in the year-earlier period. WellPoint was expected to earn $1.13, based on the average estimate of analysts polled by First Call/Thomson Financial. Revenue rose 15% to $1.97 billion from $1.70 billion.
Thousand Oaks-based WellPoint, the parent of Blue Cross of California, said it had 7.3 million customers in its medical plans at the end of the quarter, up from 6.89 million a year earlier. The company increased premiums for employers as it attempted to stay ahead of rising medical costs.
WellPoint had a gain of $1.89 million, or 3 cents, in the fourth quarter, related to the early payment of debt, which gave it net income of $80.7 million, or $1.23. The results were released after U.S. markets closed. Shares of WellPoint fell $1.31 to close at $65.63 on the New York Stock Exchange.
WellPoint’s medical membership outside California fell to 2.16 million at the end of the fourth quarter from 2.41 million a year earlier. The company has been focusing on raising rates on accounts it acquired outside California because it considers premiums on those accounts to be low with respect to medical costs.
The company’s California membership, though, rose to 5.14 million from 4.48 million as it boosted membership with big employers as well as smaller employers and individuals.
At a Glance
Other earnings, excluding one-time gains and charges unless noted:
* Dick Clark Productions Inc., a Burbank-based TV producer, reported fiscal second-quarter net income of $998,000, or 11 cents per share, compared with $867,000, or 9 cents, a year earlier. Revenue increased 38% to $22.6 million from $16.4 million.
* Pasadena-based online search service GoTo.com Inc. reported that its fourth-quarter operating loss widened to $8.9 million, or 17 cents per share, compared with a loss of $6.4 million, or 24 cents, a year earlier. Revenue jumped 23-fold to $13.3 million from $580,000, sending its shares up $1.17 to $92 on Nasdaq.
* Watson Pharmaceuticals Inc. reported fourth-quarter net income of $44.5 million, or 46 cents per share, compared with $29.5 million, or 30 cents, a year ago. The Corona-based generic-drug manufacturer reported revenue of $188.5 million, up from $152.4 million.
