In WellPoint's first earnings report since former CEO Angela Braly resigned, the second largest health insurer said Wednesday that its profit rose 1.2 percent to $691.2 million, up from $683.2 million last year.
However, that increase in net income wasn't as strong as rivals UnitedHealth and Aetna. "Earnings were ahead of expectations but it was largely due to a lower-than-expected tax rate and share count," Jason Gurda, an analyst at Leerink Swann, told Reuters. "On the operating side, they were largely in line with expectations, however most of their peers came in well ahead this quarter."
WellPoint's third-quarter revenue totaled $15.4 billion, which was unchanged from a year earlier. And its enrollment fell 2.5 percent to 33.5 million total members as its individual and employer-based plan losses couldn't overcome increases WellPoint saw in its Medicare and Medicaid business, reported the Associated Press.
Although investor and stockholder discontent marred Braly's final months and ultimately led to her resignation, WellPoint continued to reap the benefits of her acquisitions, including 1-800-Contacts and CareMore Health Group. "It looks very much like the CareMore deal, as well as 1- 800 Contacts, continue to support earnings," Thomas A. Carroll, a Stifel Nicolaus & Co. analyst, told Bloomberg. "And that comes against the backdrop of medical cost trends that remain relatively stable.
Looking to the future, Morningstar analyst Matt Coffina told the AP that WellPoint is well positioned for upcoming health reform changes, primarily because of its experience selling individual policies and a recognized brand name that should help boost membership when coverage expands.