UPDATE: WellPoint Q2 Profit Beats Street View

WellPoint

reported better-than-expected second-quarter profit. The Indianapolis, Indiana-based company posted a quarterly net income of $731 million, or $2.56 per share, compared to $800 million, or $2.64 per share, in the year-ago period. Excluding gains, the company earned $2.44 per share, versus analysts' estimates of $2.24 per share. Its total revenue gained to $18.47 billion from $17.70 billion, while operating revenue surged 4.2% to $18.23 billion from $17.5 billion. However, analysts were expecting earnings of $2.24 per share on revenue of $18.24 billion. Operating gain in the Commercial & Specialty Business segment dropped 3% to $919.6 million while operating gain in the Government Business segment surged 11.4% to $313.5 million. It posted an operating loss of $10.2 million in the other segment versus a year-ago operating loss of $6.1 million. Its sales, general and administrative expenses increased to 15.8% of operating revenue, versus 13.9%. Medical enrollment surged by 328,000 members sequentially in the quarter. “Second quarter adjusted earnings per share of $2.44 reflected strong contributions from both of our business segments and we are pleased with 2014 results year to date,” said Wayne DeVeydt, executive vice president and chief financial officer. WellPoint now expects full-year adjusted net income to be greater than $8.60 per share on operating revenue to be greater than $73.5 billion. It also projects medical membership of 37,050,000 to 37,150,000. For 2014, WellPoint projects medical costs to increase 6.5%, plus or minus 50 basis points. WellPoint shares fell 2.61% to close at $112.55 yesterday.