WellPoint 1Q profit slips 1 percent on investments

[April 22, 2009]  NEW YORK (AP) -- Health insurer WellPoint Inc. said Wednesday its profit fell 1 percent in the first quarter after the company lost hundreds of millions on investments. The company also cut its outlook for the year.

WellPoint, the nation's largest health insurer by enrollment, said it lost $228.4 million on investments in equity securities and fixed maturity securities, and as a result, it expects a smaller profit for the year.

Medical enrollment also fell 2.3 percent because of job cuts at its employer customers and an exit from state-sponsored business in Ohio and Connecticut.

Indianapolis-based WellPoint earned $580.4 million, down from $588.1 million. A stock buyback boosted earnings per share to $1.16 from $1.07. Revenue slipped to $15.53 billion.

Thomson Reuters says analysts expected a profit of $1.25 per share and $15.57 billion in revenue, excluding investment losses, which totaled 46 cents per share.

Including the first-quarter investment loss, WellPoint forecast a profit of $5.14 to $5.20 per share for the year. The company previously expected $5.51 to $5.66 per share. WellPoint also called for $61.2 billion in revenue, down from about $62 billion.

Analysts expected $5.63 per share and $62.22 billion in revenue. Analyst estimates do not include one-time items like investment losses, and WellPoint is not forecasting any further gains or losses from investments.

WellPoint lost 490,000 members during the quarter, mostly from its local businesses. Individual and senior membership also decreased. Enrollment fell to 34.6 million at the end of the quarter, and that total is expected to slide to about 33.9 million at the end of 2009.

The company spent 81.6 percent of its premium revenue on medical care, down from 85.1 percent a year ago.

[Associated Press]

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