Enrollment gains drive WellPoint 4th-quarter profits up 23 percent

Strong enrollment gains during 2006 lifted fourth-quarter profits at WellPoint Inc. by 23 percent, the nation's largest health insurer by membership reported Wednesday.

Earnings rose to $801.1 million, or $1.28 per share, from $652 million, or $1.04 per share, during the same period a year ago, before WellPoint closed its purchase of WellChoice Inc. The latest results include a penny per share in net realized investment gains, compared with a penny per share in investment losses a year ago.

Revenues grew 29 percent to $14.56 billion compared with $11.29 billion during the last quarter of 2005. The growth was led by a 30 percent gain in health care revenues to $13.77 billion.

Analysts surveyed by Thomson Financial had forecast profits of $1.27 per share on $14.51 billion in revenue.

Operating revenue during the fourth quarter rose 29 percent to $14.3 billion from $11.1 billion during the year-ago period, the company said. Premiums climbed to $13.29 billion from $10.29 billion, while administrative fees rose to $880.7 million from $705.4 million.

Excluding an accounting adjustment related to WellPoint's Puerto Rico joint venture, medical membership grew during 2006 by 1.4 percent, or 467,000 members. The national accounts business grew by 7.3 percent to 632,000, while its large group business fell by 348,000 members. On Dec. 31, medical enrollment totaled 31.4 million members.

Larry Glasscock, the company's chairman and chief executive, said in a prepared statement that the insurer also enrolled 1.6 members in Medicare Part D programs during 2006 and won five new state contracts to manage a total population of about 500,000 people in Medicaid managed care.

"We are well positioned for future growth with an array of innovative products and services that engage the consumer and promote the delivery of affordable, quality health care," Glasscock said.

WellPoint said it continues to forecast full-year profit of $5.53 per share and operating revenue of about $61.9 billion. First-quarter earnings are still seen at $1.25 per share.

On average, Wall Street is looking for quarterly profit of $1.26 per share and full-year income of $5.54 per share on revenue of $62.02 billion.

WellPoint said it expects medical enrollment to grow this year by 1.4 million members, or 4 percent, to 35.5 million members.

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On the Net: http://www.wellpoint.com