Health insurer WellPoint posted better-than-expected second quarter earnings, announcing Wednesday a profit increase of 24 percent.
The country's second-largest insurer reported second quarter net income of $800.1 million, or $2.64 a share, up from $643.6 million, or $1.94 a share, a year earlier.
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Operating revenue for the quarter, excluding investment gains and losses, also accelerated 16 percent to $17.6 billion compared with $15.2 billion in the year-ago quarter.
Enrollment increased 6.3 percent to 35.7 million members, in large part due to its acquisition of Amerigroup and its Medicaid managed care enrollees, which partially offset declines in its commercial and Medicare business.
Wellpoint said its solid financial results were due to taming medical cost increases in its employer-based business and benefiting from the Medicaid operations in its recent Amerigroup transaction.
Looking forward to the years to come, WellPoint CEO Joseph Swedish said in an earnings conference call that Medicaid is clearly a high-growth area for the company. "And while it is still early, we see the potential to gain several hundred thousand new Medicaid and dual-eligible lives by yearend 2014," he said. "This potential for top-line growth far outpaces anything that we have seen in recent years."
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Enrollment growth in Medicaid, the health insurance exchanges and other products could drive operating revenue to around $90 billion by 2016, he said.
Given its strong financial results, WellPoint "modestly" raised its full-year 2013 outlook, said Wayne DeVeydt, WellPoint executive vice president and CFO. "However we are still being prudent given our continued expectation for a fluid environment and investment spending over the second half of the year as we prepare for 2014."
WellPoint anticipates full-year net income of $8.00 a share, slightly higher than the previously forecast $7.80 a share.
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