WellChoice Boosts Guidance

The New York HMO notches up 2004 and 2005 earnings views.
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posted a strong third-quarter profit Wednesday and guided toward continuing earnings growth.

For its third quarter ended Sept. 30, the New York Blue Cross/Blue Shield operator earned $62 million, or 74 cents a share. That's up from the year-ago $52 million, or 62 cents a share, and 2 cents ahead of the Wall Street analyst consensus estimate.

Revenue rose to $1.45 billion from $1.34 billion a year earlier. Analysts had expected revenue of $1.48 billion.

"We are pleased with our financial performance this quarter, which was driven by significant growth in our core managed care products as well as by our continued focus on controlling administrative expenses," said CEO Michael A. Stocker. "We expect to add over 100,000 new national account members as of January 2005 and we are confident that our new consumer directed product and our innovative 360 (degree) Health services program will allow us to maintain and expand our leadership position in all of our markets."

WellChoice boosted 2004 earnings guidance by a few pennies to a range of $2.93 to $2.96 a share, saying it expects core commercial managed care membership growth in the range of 9% to 11% and total corporate membership growth in the range of 3% to 4%. For 2005, the company projected earnings in the range of $3.35 to $3.41 a share.

Analysts had forecast earnings of $2.87 for 2004 and $3.25 for 2005.

On Wednesday, WellChoice rose $1.33 to $39.38.