WellPoint Earnings Rise 28%
Swelling membership in key markets, including California, helped WellPoint Health Networks Inc. post a 28% increase in third-quarter profit.
The Thousand Oaks-based health insurer earned $315.1 million, or $1.97 a share, compared with $246.2 million, or $1.63, a year earlier. Revenue rose 16% to $5.85 billion from $5.05 billion. WellPoint’s purchase of Cobalt Corp. in September 2003 lifted its profit by $15.4 million during the third quarter.
Analysts had forecast a per-share profit of $1.91 for the third quarter, according to Thomson First Call.
The earnings were released after the stock market closed. WellPoint shares fell $1.94 to close Monday at $88.23 on the New York Stock Exchange.
The earnings release made no mention of the possible sale of the company to Anthem Inc. of Indianapolis. In July California Insurance Commissioner John Garamendi threw the transaction into limbo when he blocked part of the deal on the grounds that it would cost policyholders $4 billion.
An Anthem-WellPoint merger would create the nation’s largest health insurer.
More recently, regulators in three states that previously approved the Anthem-WellPoint merger have raised fresh questions about the deal because of a pledge by WellPoint’s Blue Cross of California subsidiary to invest $100 million in healthcare for California’s rural and underserved communities.
Williams Capital analyst Adam Miller told Bloomberg News that WellPoint must complete the deal without losing executives. “They were pretty close to getting this deal done and winners and losers among management were identified,” Miller said. “Now you have to step back and say, ‘We love all you guys and don’t leave.’ ”
WellPoint said its medical membership, which includes physician and hospital coverage, grew 4% to 15.6 million as of Sept. 30, from 15 million a year earlier.
The company also reported a 4.7% year-over-year increase in specialty memberships, which cover pharmacy, dental and vision among other services, to 46.8 million. WellPoint’s behavioral health business and pharmacy benefit management helped fuel the increase.
WellPoint also announced that its board had amended its stock repurchase program to authorize the buyback of 2.7 million common shares, bringing the total number of shares available for repurchase to 7.5 million.
