WellPoint profit rises 23% in 4th quarter

Insurer beats estimates as it adds customers, increases premiums

February 12, 2002|By BLOOMBERG NEWS

THOUSAND OAKS, Calif. - WellPoint Health Networks Inc., the big California health insurer that wants to buy Owings Mills-based CareFirst BlueCross Blue- Shield, said yesterday fourth-quarter profit rose 23 percent, beating estimates as the company added customers and raised premiums.

Net income rose to $109.9 million, or $1.65 a share, from $89.5 million, or $1.37 a share, a year earlier, WellPoint said. Revenue rose 40 percent to $3.42 billion from $2.44 billion.

WellPoint, parent of Blue Cross of California, has signed up profitable customers by offering patients a range of co-payments for medical care and a greater choice of doctors than some rivals.

The company also has acquired Blue Cross and Blue Shield companies in Georgia and Missouri, giving it a presence on the East Coast and in the Midwest.

"Pretty much across the board, it's a good quarter," said ABN Amro Inc. analyst Peter Costa, who has a "buy" on WellPoint and doesn't own the shares.

"They're starting to get diversified out of California, which is a good thing. They're getting what I'd say is some good strength in the major markets," Costa said.

WellPoint was forecast to earn $1.59 a share, the average estimate of analysts surveyed by Thomson Financial/First Call. WellPoint announced earnings after U.S. markets closed. Shares of the company rose $1.30 to $127.29.

The company had 10.1 million customers as of Dec. 31, an increase of 28 percent from 7.9 million the year before.

WellPoint has agreed to pay $1.3 billion for CareFirst - a deal that would add 3.1 million customers in the mid-Atlantic if approved.

For the year, WellPoint's net income rose to $414.7 million, or $6.29 a share, from $342.3 million, or $5.29 a year earlier.

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