WellPoint Health Profit Rises 23%
WellPoint Health Networks Inc., one of California’s biggest health insurers, said fourth-quarter profit rose 23%, beating estimates, as the firm added customers and raised premiums.
Net income rose to $109.9 million, or $1.65 a share, from $89.5 million, or $1.37 a share, a year earlier, WellPoint said in a news release. Revenue rose 40% to $3.42 billion from $2.44 billion.
WellPoint, the parent of Blue Cross of California, has signed up profitable customers by offering patients a range of co-payments for medical care and a greater choice of doctors than some rivals. The company also has acquired Blue Cross and Blue Shield companies in Georgia and Missouri, giving it a presence on the East Coast and in the Midwest.
“Pretty much across the board, it’s a good quarter,” said ABN Amro Inc. analyst Peter Costa, who has a “buy” on WellPoint and doesn’t own the shares. “They’re starting to get diversified out of California, which is a good thing. They’re getting what I’d say is some good strength in the major markets.”
The Thousand Oaks-based insurer was forecast to earn $1.59 a share, the average estimate of analysts surveyed by Thomson Financial/First Call.
WellPoint announced earnings after U.S. markets closed. Shares of the company rose $1.30 to $127.29 on the New York Stock Exchange.
The company had 10.1 million customers as of Dec. 31, an increase of 28% from 7.9 million the year before.
Chief Executive Leonard Schaeffer wants WellPoint to gain a foothold in the Midwest, Southeast and mid-Atlantic regions of the U.S. to compete with rivals such as Cigna Corp., UnitedHealth Group Inc. and the biggest U.S. health insurer, Aetna Inc.
WellPoint gained 1.9 million customers in March when the insurer bought Atlanta-based Cerulean Cos., the parent of Blue Cross and Blue Shield of Georgia.
