WellPoint Q1 Profit Slides; Now Sees Adj. EPS To Be Greater Than $8.40 For 2014

(RTTNews) - Health insurer WellPoint, Inc. (WLP) reported lower net income of $701.0 million, or $2.40 per share for the first quarter of 2014, including net gains of around $0.10 per share. Net income was $885.2 million, or $2.89 per share last year, that included net investment losses of about $0.05 per share.

Excluding the items noted in each period, adjusted net income amounted to $2.30 per share in the first quarter of 2014. On average, 22 analysts polled by Thomson Reuters expected earnings per share of $2.13 for the quarter. Analysts' estimates typically exclude one-time items.

On the other hand, quarterly operating revenue came in at $17.64 billion, a 1.2 percent increase from $17.44 billion in the prior-year quarter, reflecting premium increases to cover overall cost trends and new fees associated with Health Care Reform, as well as higher membership in the Medicaid, Commercial self-funded and FEP businesses. This was partially offset by a decline in the Local Group business due to the State of New York contract conversion to a self-funded arrangement, and a decline in Medicare revenue reflecting lower enrollment as the company repositioned its Medicare Advantage product offerings, the company added. Analysts estimated revenues of $17.96 billion for the quarter.

Looking ahead, the company now sees adjusted earnings per share to be greater than $8.40 for 2014, reflecting balanced enrollment growth across its served markets. Analysts project earnings of $8.40 per share for the year. Full-year GAAP net income is now estimated to be greater than $8.50 per share, including $0.10 per share of net favorable items from the first quarter.

During the first quarter of 2014, WellPoint paid a quarterly dividend of $0.4375 per share, representing a distribution of cash totaling $123.4 million.