WellPoint, Inc. (NYSE: WLP) today announced that third quarter 2012 net income was $691.2 million, or $2.15 per share. These results included $0.06 per share of net income resulting from net investment gains, partially offset by acquisition related costs. Net income in the third quarter of 2011 was $683.2 million, or $1.90 per share, and included net investment gains of $0.13 per share.
Excluding the items noted in each period, adjusted net income was $2.09 per share in the third quarter of 2012, an increase of 18.1 percent compared with adjusted net income of $1.77 per share in the prior year quarter (refer to GAAP Reconciliation table for a reconciliation to the most directly comparable measure calculated in accordance with U.S. generally accepted accounting principles, or “GAAP”).
“Our third quarter results compared favorably to our expectations and reflected more consistent execution across our businesses. We are preparing for a successful Amerigroup integration and have recently taken steps to better align business level leadership to execute on the growth opportunities before us,” said John Cannon, interim president and chief executive officer.
“The third quarter reflected a combination of improved core operating performance, administrative expense management, and favorability in the capital management of the company. Our earnings were supported by strong adjusted operating cash flow in the quarter and sequential increases in medical claims reserves and days in claims payable,” said Wayne DeVeydt, executive vice president and chief financial officer. “Operating trends in the quarter increase our confidence in our full year 2012 outlook of $7.30 to $7.40 in adjusted EPS.”
Medical enrollment was approximately 33.5 million members at September 30, 2012, a decrease of 862,000 members, or 2.5 percent, from approximately 34.4 million at September 30, 2011. Membership in the Local Group and National businesses declined by 694,000 and 315,000, respectively, as the Company repositioned product offerings in the New York small group market and adjusted its administrative fee structure for certain National Accounts in 2012. Enrollment was also impacted by economy-related in-group membership attrition and competitive situations in certain Local Group markets.
The declines in Local Group and National were partially offset by membership growth in the Senior and State Sponsored businesses. Senior membership increased by 96,000, primarily due to the Company’s geographic expansion into new Medicare Advantage service areas for 2012. State Sponsored enrollment increased by 42,000, due to growth in existing programs.