WellPoint (WLP) beat third-quarter targets by a penny and guided in line for the year.
The Indianapolis, Ind., health insurer made $811 million, or $1.29 a share, for the third quarter ended Sept. 30, up from the year-ago $641 million, or $1.02 a share. Revenue rose to $14.43 billion from $11.16 billion a year earlier.
The latest quarter included a nickel a share in one-time gains. Analysts surveyed by Thomson Financial were looking for a $1.23-a-share profit on sales of $14.36 billion.
"We are very pleased with our continued strong performance in 2006, and our third quarter results reinforce our earnings growth expectations for the remainder of the year," said CEO Larry C. Glasscock. "Looking ahead to 2007, we anticipate another year of robust growth in our National Accounts business, along with further expansion of our Medicaid membership base following our recent contract awards. As we enter the open enrollment season, we are seeing significant interest and early activity for our Lumenos consumer-driven health plans. These innovative and affordable CDHP products will be available beginning January 1st for individuals, local group business and national accounts. While we will release our specific 2007 outlook in December, we expect continued earnings per share growth and further improvement in operating margins through more efficient operations."
"We continue to focus on improving returns for our shareholders through our share repurchase program," said finance chief David C. Colby. "During the third quarter, we used $399.6 million to repurchase 5.4 million shares of our common stock and the board approved an additional $500 million in share repurchase authorization, bringing our 2006 total authorization to $4.5 billion, which we plan to utilize in the fourth quarter.
"Cash flow from operations was strong for the quarter. While reported operating cash flow for the quarter was $614.7 million, this amount included only two months of Centers for Medicare & Medicaid Services payments which average $448.4 million per month. If we had received three CMS payments during the quarter, operating cash flow would have been 1.3 times net income for the third quarter. We continue to expect strong cash flow during the next year and will continue to use our cash to grow our business and maximize shareholder value."
The company said it expects to make $4.81 a share for the year, matching the Thomson Financial target.