WellPoint Posts Rise in Profit, Revenue

WellPoint Health Networks Inc. said Wednesday that profit rose more than 50% in the fourth quarter as the company benefited from its September acquisition of Cobalt Corp.

Net income increased to $271.5 million, or $1.73 a share, from $180 million, or $1.18, a year earlier. Revenue rose 21% to $5.5 billion.

Thousand Oaks-based WellPoint, California’s biggest insurer, said it added about 1.2 million members through the purchase of Cobalt and integrated the Milwaukee-based firm faster than it had anticipated.

WellPoint is due to be acquired by Anthem Inc., an Indianapolis-based managed-care company, later this year. The combination, which was valued at about $16.4 billion when it was announced in October, would have about 26 million members and be the biggest U.S. health insurer.

“They have had better savings and lower costs by merging operations with Cobalt,” said Michael Obuchowski, a money manager at Altair Investments in New York, which holds shares of WellPoint, Anthem and UnitedHealth Group Inc. “They do acquisitions well, and that bodes well for the Anthem acquisition in the future.”

The quarterly results exceeded the $1.71-a-share average estimate of 15 analysts surveyed by Thomson First Call. Full-year profit was $935.2 million, or $6.16 a share, the company said.

Shares of WellPoint rose 41 cents to $101.30 on the New York Stock Exchange. They increased 36% in 2003.

The company is beginning an initiative to help doctors cut administrative costs and communicate more easily with patients and pharmacies, Chief Executive Leonard Schaeffer said.

Under the plan, WellPoint will give 19,000 of its physicians hand-held computers to help with prescribing and desktop computers for accessing the company’s online options, such as claims processing.

That kind of increased use of technology has helped WellPoint cut its debt relative to total capital to 18.6% at the end of 2003 from 20.4% in 2002.