WellPoint Inc., one of the nation’s biggest health insurers and parent of Anthem Blue Cross Blue Shield of Connecticut, said its profit fell 7.6 percent in the second quarter as it felt the effect of investment losses and continued to see enrollment declines.
Its earnings excluding the investment losses topped Wall Street estimates, and it reaffirmed its full-year guidance.
The Indianapolis company, which operates Blue Cross Blue Shield plans in 14 states, earned $693.5 million, or $1.43 per share, down from $750.5 million, or $1.44 per share, a year ago.
WellPoint said its adjusted earnings came to $1.50 per share, excluding 7 cents per share in investment losses.
Revenue fell nearly 2 percent to $15.41 billion from $15.67 billion a year ago.
Analysts expected, on average, earnings of $1.43 per share on $15.4 billion in revenue, according to Thomson Reuters. Analysts typically exclude one-time items.
At 11 a.m., its shares were down $2.40, or 4.4 percent, to $51.98.
Total medical enrollment fell by 1.1 million members, or 3 percent, to 34.2 million people compared to the same quarter last year mainly due to rising unemployment. The insurer has lost 828,000 members so far this year.
Fully insured membership fell 6 percent to 15.7 million compared to last year. Fully insured plans are more lucrative for insurers than self-funded coverage that they administer.
WellPoint said it reaffirmed its adjusted profit outlook for 2009. The insurer expects a full-year profit of $5.06 to $5.12 per share. That includes net investment losses of 54 cents per share, but it also includes no more investment gains or losses beyond what it recorded so far this year. (AP)
Reader response:
“Perhaps Obama and Congress should force all healthcare insurance companies to be mutual insurance companies (i.e. owned by the insured) where healthcare premiums (re; see other articles about BCBS increasing premiums) do not increase due to poor investment income, stockholder’s demands for dividends/stock price appreciation.” — Steven Shore, Shore CommunicationsÂ
