best insurance stock - WellPoint Inc q4 earnings report today , WellPoint net profit report today january 23 2012 : WellPoint Inc q4 earnings reported today WellPoint Inc reported a higher-than-expected fourth-quarter profit on Wednesday as it kept medical costs down , but the second-largest U.S. health insurer said it was taking a "prudent" view of 2013 in the face of industry reform.
WellPoint , which sells private health insurance to businesses and individuals and also provides government insurance for the elderly and the poor , is preparing for a round of changes resulting from the U.S. Affordable Care Act.
WellPoint , which sells private health insurance to businesses and individuals and also provides government insurance for the elderly and the poor , is preparing for a round of changes resulting from the U.S. Affordable Care Act.
Later this year , states and the federal government will begin selling health insurance on exchanges for 2014 , and new insurance taxes are on the way. Pressure on prices for medical services is also a concern for insurers.
WellPoint said that given the "fluid and dynamic" market over the next 18 to 24 months , it expected a 2013 net profit of at least $7.60 per share , including the costs of integrating its recent acquisition of smaller competitor Amerigroup.
Analysts on average have been expecting $7.98 a share , according to Thomson Reuters I/B/E/S. It was not immediately clear if the two numbers are comparable.
"It's lighter than we thought , but it's also including Amerigroup's integration costs ," Leerink Swann analyst Jason Gurda said , so it was not clear that investors would be disappointed by the outlook.
Shares of WellPoint were down 0.4 percent at $63.54 in early trading.
Management changes might be behind the conservative forecast , Gurda said. WellPoint is being run by an interim chief executive officer , John Cannon , who took over following the abrupt resignation of Angela Braly in August.
Chief Financial Officer Wayne DeVeydt told analysts on a conference call on Wednesday that the company still expected to name a new CEO this quarter.
He said the 2013 outlook included 20 cents to 25 cents a share in Amerigroup-related costs and $300 million in additional investments such as preparation for the health insurance exchanges.
Besides healthcare reform and broad-based cuts in government medical payments , areas of uncertainty for this year include the costs of the flu as more members visit the doctor and overall use of medical services , DeVeydt said.
TAXES BOOST PROFIT
The company said that fourth-quarter net profit had risen to $464.2 million , or $1.51 per share , helped by an income tax settlement and investment gains.
WellPoint , which included Amerigroup figures in its earnings report for the first time , said it had 36.1 million members as of Dec. 31 , up 5.5 percent from a year earlier.
It said it expected membership to drop in 2013 to a range of 35.3 million to 35.5 million.
Excluding the tax settlement , investment gains and other special items , the company said earnings had increased to $1.03 per share from 99 cents a year earlier.
On that basis , analysts on average had been expecting a profit of 95 cents per share , according to Thomson Reuters I/B/E/S.
WellPoint said that lower-than-anticipated medical costs in its private insurance business , stable membership numbers and strong operating cash flow helped earnings during the quarter. It said its fourth-quarter tax rate had been abnormally low because of the settlement with the Internal Revenue Service.
Revenue for the quarter rose to $15.27 billion from $15.18 billion a year earlier.
WellPoint's results followed those of the larger rival UnitedHealth Group Inc , which last week reported a slight drop in net income and said the next two years had the potential for growth and opportunity.
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