WELLPOINT: Posts 3Q Gains
WellPoint Health Networks Inc. was behind the 9.35% surge in the Morgan Stanley Health Care Payer Index, "its biggest one-day percentage gain since the index was established in December 1994." Woodland Hills-based Wellpoint announced Wednesday that its third-quarter profits climbed 20% (Bloomberg News/Los Angeles Times, 10/30). The increase set the managed care firm apart from competitors who reported losses in the face of "rising health care costs and problems with Medicare." The Los Angeles Times reported that excluding a favorable tax benefit, WellPoint's earnings vaulted to $66.7 million, or 95 cents a share, from $55.6 million, or 79 cents a share for the same period last year. The posting matched First Call Corp. analysts' consensus estimate. The company saw total revenue rise 11% to 1.63 billion from $1.47 billion last year. Furthermore, the Times reported, "a favorable federal tax ruling related to its conversion from a nonprofit entity" included an $85.5 million benefit, boosting its net income to $152.2 million. The strong third-quarter financials "come just three months after the company took $109 million" in charges for the sale of its "workers compensation unit as well as losses on shares it held in FPA Medical" (10/29).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.