Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):
WellPoint Profit Rises 34%, Aided By Cost Controls
Summary: Health insurer WellPoint Inc. (WLP), the largest U.S. managed-care company by commercial enrollment, posted a 34% increase in second-quarter profit, citing disciplined front office management and the effects of a recent acquisition. Second-quarter net income rose to $751.2 million, or $1.17 a share, from $559.4 million, or 90 cents a share, in the year-earlier period. Revenue climbed 27% to $13.94 billion from $10.99 billion. The latest results include the operations of WellChoice Inc., acquired in December; the year-earlier results don't, which accounts for the seemingly enormous growth in profits and revenues. WellPoint increased its EPS estimate for FY 2006 to $4.74; in May, the projection was for earnings of $4.63 a share. The forecast assumes completion of the company's share-repurchase program in the third quarter, for which $399.6 million is authorized. Medical membership totaled almost 34.2 million as of June 30 -- short of some analysts' estimates -- an increase of more than 5.3 million members from 28.8 million a year earlier. The enrollment includes 4.8 million members gained from the WellChoice acquisition. WellPoint expects year-end enrollment of 34.5 million members, compared with a previous forecast of 34.8 million.