“INDIANAPOLIS (AP) — WellPoint Inc.’s fourth-quarter earnings jumped 38 percent compared to the final quarter of 2011, when the nation’s second largest health insurer incurred a big hit from its Medicare Advantage business.
But the Blue Cross Blue Shield insurer also said Wednesday it could make less this year than it did in 2012, as it prepares for expansion resulting from the health care overhaul and other growth opportunities.
The Indianapolis company earned $464.2 million, or $1.51 per share, in the three months that ended Dec. 31. That’s up from $335.3 million, or 96 cents per share, in the last quarter of 2011. Excluding the investment and tax settlement gains and other adjustments, earnings totaled $1.03 per share.
Operating revenue inched up less than 1 percent to $15.27 billion. That excludes investment gains.
Analysts expected, on average, earnings of 94 cents per share on $15.29 billion in revenue, according to FactSet. Analysts typically exclude investment gains from their estimates.
In the final quarter of 2011, WellPoint took a $50 million hit from its Medicare Advantage business, which involves privately run versions of the government’s Medicare program that covers the elderly and disabled people. The insurer had problems with a plan in Northern California that attracted more customers with a higher risk profile than it expected because a competitor left the market. That helped push quarterly earnings down 39 percent.
In the final quarter of 2012, the insurer’s performance got a lift from $243 million in investment gains and an income tax settlement.
WellPoint’s membership grew more than 5 percent to 36.1 million people, largely due to its recently completed, $4.46 billion acquisition of Medicaid coverage provider Amerigroup Corp. Medicaid is the state-federal program that provides health coverage for the needy and disabled people.
For the full year, WellPoint earned $2.7 billion, or $8.18 per share, on $60.73 billion in operating revenue….”
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