WellPoint Earnings: Here’s Why Investors are Slightly Disappointed

WellPoint Inc. (NYSE:WLP) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are down 0.58%.

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WellPoint Inc. Earnings Cheat Sheet

Results: Net income increased 38.44% to $464.2 million ($1.51 per diluted share) in the quarter versus a net gain of $335.3 million in the year-earlier quarter.

Revenue: Decreased 0.31% to $15.27 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: WellPoint Inc. reported adjusted net income of $1.51 per share. By that measure, the company beat the mean analyst estimate of $0.95. It missed the average revenue estimate of $15.28 billion.

Quoting Management: “Our fourth quarter results reflected lower than anticipated Commercial medical costs and stability in our membership base. Our results were supported by the strength of our operating cash flow and year-end balance sheet metrics,” said Wayne DeVeydt, executive vice president and chief financial officer. “We are encouraged by the performance of our associates and the business in the last six months, but we also want to retain an appropriately prudent stance in our outlook, in light of what we expect to be a fluid and dynamic market over the next 18 to 24 months. This is reflected in our initial expectation for 2013 EPS of at least $7.60.”

Key Stats:

Revenue decreased 0.54% from $15.35 billion in the previous quarter. Net income decreased 32.84% from $691.2 million in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $2.37 to a profit $2.41. For the current year, the average estimate has moved up from a profit of $7.37 to a profit of $7.45 over the last ninety days.

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(Company fundamentals provided by Xignite Financials.)