WellPoint 4th-quarter net income drops

[January 26, 2011]  INDIANAPOLIS (AP) -- WellPoint Inc. said Wednesday that its fourth-quarter net income fell as the prior-year period included a large gain related to a sale, but the company's adjusted results beat Wall Street expectations.

The largest publicly traded health insurer based on enrollment earned $548.8 million, or $1.40 per share, for the three months ended Dec. 31. That's down from $2.74 billion, or $5.95 per share, a year earlier.

WellPoint's performance in the final quarter of 2009 was fueled in part by the sale of its NextRx subsidiary to Express Scripts, which gave the company a $3.79 billion gain for that period.

Adjusted earnings during the most recent quarter rose to $1.33 per share from $1.16 per share.

Operating revenue fell 4 percent to $14.42 billion from $15.06 billion.

Analysts forecast a smaller profit of $1.23 per share on $14.37 billion in revenue.

Medical enrollment surpassed 33.3 million members at quarter's end, down 1 percent from the year-ago period. The company operates Blue Cross Blue Shield plans in 14 states, including California, New York and Ohio.

The decline mainly came from the company's business outside of Blue Cross Blue Shield, which experienced a reduction of 516,000 members because of the transfer of UniCare individual and group business in Texas and Illinois to another Blue Cross & Blue Shield plan.

For the full year, the company earned $2.89 billion, or $6.94 per share, down from $4.75 billion, or $9.88 per share in 2009. Operating revenue fell to $57.8 billion from $60.8 billion.

The Indianapolis company expects 2011 earnings of at least $6.30 per share. Analysts forecast $6.58 per share.

Rival UnitedHealth Group Inc. said earlier this week its fourth-quarter profit jumped 10 percent as a drop in health care use continued to help the insurer.

Analysts and insurance executives have said health care use dropped compared to the final quarters of 2009 in part because swine flu cases from that year elevated claims. They also say use tends to fall in a struggling economy, as consumers look to save money.

WellPoint's California subsidiary, Anthem Blue Cross, delayed and then scaled back rate increases last year after it took heavy criticism nationally for planning hikes that averaged 25 percent for individual customers. The insurer later toned down the increases to an average of 14 percent. WellPoint has said high unemployment and rising care costs were behind the hikes.

[Associated Press]

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