WellPoint 1Q profit rises on consumer business

[April 28, 2010]  NEW YORK (AP) -- Health insurer WellPoint Inc. said Wednesday its profit jumped 51 percent in the first quarter as it did more government business and the weak flu season led to lower medical costs.

The Indianapolis company is the largest commercial health insurer based on membership, with 33.8 million members at the end of the quarter.

The company earned $867.8 million, or $1.96 per share, up from $580.4 million, or $1.16 per share, one year ago. Excluding one-time costs and gains, WellPoint earned $1.95 per share. Revenue slipped to $15.1 billion from $15.14 billion.

According to Thomson Reuters, analysts expected a profit of $1.67 per share and $14.72 billion in revenue.

WellPoint runs Blue Cross Blue Shield plans in 14 states and Unicare plans in several others. The company said it did more state-sponsored business and received greater reimbursement for some programs. It did not have to spend as much on flu treatment because the flu season was surprisingly mild. Results from stand-alone Medicare Part D programs also improved.

Revenue from WellPoint's the consumer business fell by about 1 percent, but profits climbed 49 percent. Total premium revenue fell 2 percent, and other revenue dropped sharply. WellPoint had $154 million in other revenue a year ago, and $5.9 million in the latest quarter.

The company spent 81.8 percent of its premium revenue on medical care, down from 82.5 percent a year ago. That helped counteract a 2-percent decrease in medical enrollment.

The company backed its annual profit forecast of at least $6 per share. Analysts expect a profit of $6.14 per share, on average.

WellPoint now expects enrollment to fall by about 600,000 this year, giving it 33.1 million members at year-end. That's below a prior forecast of 33.3 million.

[Associated Press]

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