WellPoint’s profit soars 24% in the second quarter
WellPoint, the country’s second-largest insurer, beat Wall Street expectations in the second quarter, seeing its profit jump 24% as lower medical costs partly helped the Indianapolis-based company post strong results.
WellPoint, which runs Anthem Blue Cross in California and health plans in 13 other states, reported Wednesday that net income rose to $800.1 million, or $2.64 per share. That’s compared to $643.6 million, or $1.94 per share, during the same quarter in 2012.
Excluding some items, the company said adjusted earnings were $2.60 per share.
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The results buoyed the company’s future expectations. It has now adjusted its full-year earnings outlook upward to $8 per share, up 20 cents from its earlier projections.
Operating revenue grew 16% to $17.6 billion, excluding investment gains or losses.
“We are pleased with our second-quarter results and encouraged by the positive momentum we have across the organization,” said Joseph Swedish, WellPoint’s chief executive since March.
This is the second earnings report that has beat analyst expectations under Swedish, who took the helm after the company’s previous chief executive, Angela Braly, was ousted last year.
WellPoint’s results were partly lifted by its recent acquisition of Amerigroup Corp., a Medicaid insurer.
“Our commercial businesses continue to perform well and we have achieved improvements in our Medicaid operations, largely reflecting benefits from the Amerigroup transaction,” Swedish said in a statement.
Carl McDonald, a healthcare analyst at Citigroup, said WellPoint’s aquisition bolstered the company’s financial results as it has enrolled more members. Medical enrollment is now 35.7 million.
“Earnings from WellPoint’s government business more than doubled sequentially in the second quarter, aided by the California Medicaid business, favorable Medicare prescription drug plan seasonality, and what was likely another strong quarter of Medicare Advantage results,” McDonald said.
WellPoint’s shares closed Tuesday at $87.51, the highest price since January 2008. It’s gained 44% over the last year. Shares were trading at $88.41 Wednesday, up nearly 1% from the previous day’s close.
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ricardo.lopez@latimes.com
