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Investment losses caused profit to fall at WellPoint Inc.
in the first quarter, and the company lowered its profit forecast for the year.
The Indianapolis-based health insurer earned $580 million
in the three months ended March 31, a 1-percent decline from the same quarter a
year ago. The company suffered $228 million in after-tax investment losses.
On a per-share basis, WellPoint earned $1.16 per share,
up 8 percent from the same quarter a year ago. WellPoint has fewer shares
outstanding now than it did in 2008.
Wall Street analysts forecasted earnings of $1.25 per
share, according to a survey by Thomson Financial.
Because of the investment losses, which totaled 46 cents
per share, WellPoint adjusted its 2009 profit forecast down to $5.14 to $5.20 per share. In February, the company predicted
it would earn $5.51 to $5.66 per share.
WellPoint lost 490,000 customers in the quarter and
expects to lose more than 1 million for the entire year, slightly more than the
company predicted in February. WellPoint currently provides health benefits for
34.6 million people.
WellPoint is losing customers rapidly among smaller
employers it classifies as local groups. That segment lost 814,000 people over
the past year.
But WellPoint’s national accounts, which typically cover
multiple states, added 400,000 people in the last year.
“Our first quarter was
solid in light of the current economy, and it is clear that the performance-improvement
initiatives we put into place last year are generating positive results,”
said WellPoint CEO Angela F. Braly, in a statement. “While our membership
levels have been impacted by employer workforce reductions, we continue to take
action to make our products more attractive and create more value for our
customers.”
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