Health benefits company WellPoint Inc. (WLP) Wednesday reported a surge in fourth-quarter profit, helped by a gain from the sale of its NextRx pharmacy benefit management subsidiaries to Express Scripts, Inc. (ESRX). Looking ahead, the company issued earnings forecast for 2010.
The Indianapolis, Indiana-based company's net income for the fourth quarter jumped to $2.742 billion or $5.95 per share from $331.4 million or $0.65 per share reported for the same quarter last year.
The latest results included net after-tax income of about $2.2 billion, or $4.79 per share, resulting from a gain on the sale of the NextRx pharmacy benefit management subsidiaries to Express Scripts, partially offset by costs for restructuring activities and intangible asset impairments. In the previous year, results included net investment losses of $350.5 million after-tax, or $0.69 per share.
Adjusted net income for the quarter dropped to $536 million or $1.16 per share from $681.9 million or $1.34 per share in the prior year.
On average, 18 analysts polled by Thomson Reuters expected the company to earn $1.02 per share for the quarter. Analysts' estimate typically exclude special items.
Income before income taxes surged to $4.340 billion from last year's $507.8 million. Total revenues increased over 26% to $19.047 billion from the previous year's $15.070 billion, mainly due to the gain. Total operating revenue slipped to $15.057 billion from last year's $15.426 billion, mainly due to lower fully insured enrollment in 2009. Revenue from Premiums slipped 2.1% to $13.985 billion, while Administrative fees dropped 2.3% to $952.9 million. Analysts were looking for revenues of $15.13 billion for the quarter.
In Commercial Business, operating revenue dropped 1.7% to $9.345 billion and operating profit plunged 56.5% to $316.8 million. Commercial enrollment declined by 948,000, or 3.3%, during 2009, reflecting the rise in unemployment.
In Consumer business, fourth-quarter operating revenue was $3.926 billion, down 4.3% from last year, and operating profit dropped 32.6% to $158.9 million.
Income tax expense increased to $1.598 billion from the previous year's $176.4 million. Medical membership was 33.7 million at the end of December 31, 2009. During the fourth quarter, the company repurchased 16.5 million shares of its common stock for $827 million.
In the third quarter, WellPoint's net income dropped to $730.2 million or $1.53 per share from $820.7 million or $1.60 per share in the prior-year quarter. Quarterly operating revenues edged down 0.7% to $15.2 billion from the previous year's $15.3 billion.
For the full year, net income increased to $4.746 billion or $9.88 per share from $2.491 billion or $4.76 per share reported in 2008. Full year 2009 adjusted net income was $2.9 billion, or $6.09 per share. Total revenues increased to $65.028 billion from $61.251 billion in the prior year. Total operating revenue in 2009 slipped to $60.829 billion from $61.579 billion in 2008. Analysts were looking for earnings of $5.93 per share on revenues of $60.98 billion.
Looking ahead, Angela Braly, president and chief executive officer of the company, said, "We are off to a good start in 2010, with more than 400,000 net new National Account members effective January 1. Throughout the year, we will be making important investments in our businesses to create the best health care value for our customers and capitalize on opportunities to drive future growth."
According to Wayne DeVeydt, executive vice president and chief financial officer of the company, "We continue to maintain a strong and conservative balance sheet, and are comfortable with our outlook for earnings per share of at least $6.00 in 2010."
Wall Street expects 2010 earnings in the range of $5.60-$6.40 per share with a consensus of $6.11 per share. Among others in the industry, UnitedHealth Group Inc. (UNH) last week posted higher profit for the fourth quarter, reflecting strong performance from its health services businesses, and public and senior health benefits programs. The company's fourth-quarter net income was $944 million or $0.81 per share, compared to $726 million or $0.60 per share in the year-ago quarter. Total revenues for the recent quarter advanced to $21.8 billion from the previous year's $20.5 billion. Further, the company confirmed earnings forecast for the full year 2010.
WLP closed Tuesday's regular trade at $63.88, down from the previous close of $65.55, on 7.40 million shares.
For comments and feedback contact: editorial@rttnews.com
June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.