WellPoint Posts Increased Fourth-Quarter Profit, Revenue
Thousand Oaks-based WellPoint Health Networks on Wednesday announced that fourth-quarter net income increased 50% to $271.5 million, or $1.73 per share, from $180 million, or $1.18 per share, a year earlier, Bloomberg/Los Angeles Times reports. Fourth-quarter revenue increased by 21% to $5.5 billion, and results for the quarter exceeded the $1.71 per share average that 15 analysts surveyed by Thomas First Call predicted. In addition, membership increased by 1.2 million through the acquisition of Milwaukee-based Cobalt, which was integrated faster than WellPoint officials had expected. Profit for 2003 was $935.2 million, or $6.16 per share.
Michael Obuchowski, money manager at Altair Investments in New York, said that WellPoint has had "better savings and lower costs by merging operations with Cobalt," adding, "They do acquisitions well, and that bodes well for the Anthem acquisition in the future" (Bloomberg/Los Angeles Times, 1/29). Indianapolis-based Anthem and WellPoint in October announced that they would merge. The combined company, which will use the name WellPoint and have headquarters in Indianapolis, will have $27.1 billion in assets, 40,000 employees and 26 million members in 13 states. Under the merger, Anthem will pay shareholders $23.80 in cash and one share of Anthem stock for each share of WellPoint stock. WellPoint CEO Leonard Schaeffer will become chair of the combined company; Anthem CEO Larry Glasscock will become president and chief executive of the combined company. State regulators must approve the merger, which could become final by the middle of 2004. WellPoint currently faces a shareholder class-action lawsuit over the proposed merger (California Healthline, 11/17/2003).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.