WellPoint Inc. (WLP), the second-biggest U.S. health insurer, said profit rose 24 percent, beating analysts’ estimates, as the company benefited from medical costs that came in below its projections. The company raised its annual forecast.
Second-quarter net-income jumped to $800.1 million, or $2.64 a share, from $643.6 million, or $1.94, a year earlier, the Indianapolis-based carrier said today in a statement. Earnings excluding one-time items of $2.60 a share beat the $2.08 average of 19 analysts’ estimates compiled by Bloomberg. Revenue rose 16 percent to $17.6 billion.
UnitedHealth Group Inc. (UNH), the biggest insurer, also beat estimates last week thanks to lower medical claims, even as hospital chains such as Community Health Systems Inc. reported patient admissions were down in the second quarter. The shift has helped send managed-care stocks soaring this year, said Scott Fidel, a Deutsch Bank analyst in New York.
“The soft health-care utilization trends that supported earnings in 1Q13 have continued into 2Q13,” Fidel wrote in a July 16 note to clients. “Medical cost trends have been tracking at or near historical lows through April.”
The company raised its 2013 earnings forecast to at least $8 a share from its previous projection of at least $7.75 a share.
WellPoint rose less than 1 percent to $87.51 in New York trading yesterday. The shares have gained 44 percent for the year through yesterday.
UnitedHealth is based in Minnetonka, Minnesota, and Community Health in Franklin, Tennessee.
To contact the reporter on this story: Alex Nussbaum in New York at anussbaum1@bloomberg.net
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net
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