Wellpoint Inc. Earnings Cheat Sheet: Two Straight Quarters of Profit Drops

S&P 500 (NYSE:SPY) component Wellpoint Inc. (NYSE:WLP) reported its results for the third quarter. WellPoint is a health benefits company which offers a spectrum of network-based managed care plans to employers, individuals, and seniors.

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Wellpoint Earnings Cheat Sheet for the Third Quarter

Results: Net income for Wellpoint Inc. fell to $683.2 million ($1.90 per share) vs. $739.1 million ($1.84 per share) a year earlier. This is a decline of 7.6% from the year earlier quarter.

Revenue: Rose 3.8% to $15.16 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: WLP reported adjusted net income of $1.77 per share. By that measure, the company beat the mean estimate of $1.66 per share. Analysts were expecting revenue of $15.12 billion.

Quoting Management: “We added 169,000 medical members during the third quarter and have now grown by more than one million members on a year-to-date basis, while reducing selling, general and administrative expenses by $185 million, or nearly three percent. Our ability to add new customers while controlling costs demonstrates our execution and emphasis on creating a more affordable operating model for our customers,” said Angela F. Braly, chair, president and chief executive officer. “We are also investing strategically in innovative services and capabilities designed to enhance future growth and improve health care costs and quality for our members. We expect that our focus on creating the best health care value in the industry will continue to drive success in 2012 and beyond.”

Key Stats:

The company has now topped analyst estimates for the last four quarters. It beat the mark by 4 cents in the second quarter, by 48 cents in the first quarter, and by 12 cents in the fourth quarter of the last fiscal year.

The company has now seen net income fall in each of the last two quarters. In the second quarter, net income fell 2.9% from the year earlier quarter.

The company’s revenue has now risen for two straight quarters. In the second quarter, revenue increased 4.5% to $15.1 billion from the year earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the fourth quarter has moved down from $1.28 a share to $1.17 over the last ninety days. For the fiscal year, the average estimate has moved down from $7.12 a share to $7.04 over the last ninety days.

Competitors to Watch: CIGNA Corporation (NYSE:CI), Humana Inc. (NYSE:HUM), UnitedHealth Group Inc. (NYSE:UNH), Aetna Inc. (NYSE:AET), Universal American Corp. (NYSE:UAM), Health Net, Inc. (NYSE:HNT), HealthSpring, Inc (NYSE:HS), Molina Healthcare, Inc. (NYSE:MOH), Coventry Health Care, Inc. (NYSE:CVH), and Triple-S Management Corp. (NYSE:GTS).

Investing Insights: Here’s Why Chipotle’s Stock Keeps Winning.

(Source: Xignite Financials)

 

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