Reduction in Medical Costs Boosts WellPoint Margins beyond Estimates- WLP, UNH

Posted On 25 Jan 2013

Northern, WI 1/25/2013 (avauncer) –WellPoint Inc. (NYSE:WLP), based in Indianapolis announced revenue in the fourth quarter higher that the analysts’ forecasts. WellPoint Inc. (NYSE:WLP), the second largest U.S. health insurer, estimated for this year a minimum increase of $7.60 per share paring to $7.93, what analysts forecasted. Due to the fact that the company is looking for a new chief executive officer, estimates are being carefully made; this is what said Rigg, analyst for Susquehanna Financial Group.

The new company’s leader is going to be a replacement for Angela Braly, who resigned in the context of discontent regarding WellPoint Inc. (NYSE:WLP)’s performance, last August. Without offering other details, John Cannon for the time being interim at WellPoint Inc. (NYSE:WLP), declared during a phone interview that the hiring process is estimated to be finished no later than the end of this trimester.

According to data unveiled by Bloomberg, the income apart from a tax agreement and assets obtained was $1.03 per share. This is with a value of nine cents bigger than what analysts forecasted. This represents a rising of 36.1 million for the medical plan appurtenance. In 2012, WellPoint Inc. (NYSE:WLP) acquired Amerigroup, with $4.9 billion, which is the biggest insurer dedicated to special government sponsored Medicaid campaigns for the underprivileged, with 2.7 million members. This purchase led to an increase of 5%.

One analyst, Chris Rigg, termed the practice “to offer a conservative outlook” as rational. Nobody wants to back a new CEO, “into the corner” he added.

Binns, a spokesperson for WLP declared across an e-mail that the estimates of this year are showing doubts regarding the discussions of President Obama’s health care solution. The Amerigroup acquisition is going to cost some addition financial resources that are included in WLP’s forecast.

Cannon didn’t declared estimates for the year 2014 but gave some details regarding WellPoint Inc. (NYSE:WLP)’s overview: “Certainly, our intention is to grow and we are positioning the company to do that”

Profits jumped for WellPoint Inc. (NYSE:WLP) from $15.2 billion in 2011 to $15.3 billion last year. The last quarter revenue rose 38% to $464.2 million, meaning a value of $1.51 per share paring with $335.3 million, in 2011.

The costs of employer sponsored medical plans managed by the company also remained below the earlier estimates.

According to a report released by UnitedHealth Group Inc. (NYSE: UNH), the largest medical insurer in the U.S., very few of Americans chose to utilize their medical insurance this year.

The shares of WellPoint Inc. (NYSE:WLP) were up 1.33% to $65.69. The shares of UnitedHealth Group Inc. (NYSE:UNH) down 0.55% to $56.22.

About the Author

Karen Kinsey with a degree in journalism. She ended up going into the education field and has been a teacher for the past six years. Karen Kinsey is a television producer, writer, editor, professor, wife, mother, sister, daughter, friend and longtime, diehard Phillies fan. Karen Kinsey writings have been featured in such mainstream media as The Guardian, USA Today, Global Times, China Daily, Beijing Review, among others.