WellPoint (WLP) revealed better-than-expected third-quarter earnings on Wednesday with the help of tighter expenses, however sales fell short as membership growth slowed and commercial revenues slumped.
Medical enrollment fell 2.5% last quarter to 33.5 million members as of Sept. 30, while membership fell 694,000 and 315,000, respectively, in its local and national businesses.
Operating revenue last quarter slipped narrowly to $15.13 billion, edging just below Street’s view of $15.33 billion, hurt by weaker premium revenues.
Led by better cost management, the acquisition of 1-800 CONTACTS and the addition of 96,000 members in its senior and state-sponsored businesses, though, the Indianapolis-based insurer posted net income of $691.2 million, or $2.15 a share, up from a year-earlier $683.2 million, or $1.90.
Excluding one-time items, WellPoint earned $2.09 a share, topping average analyst estimates of $1.84 in a Thomson Reuters poll.
“Our third quarter results compared favorably to our expectations and reflected more consistent execution across our businesses,” WellPoint CEO John Cannon said in a statement.
WellPoint also attributed the results to improved core operating performance and tighter administrative expenses.
The company said it is preparing for a successful integration of Amerigroup (AGP), which it bought in July for about $4.5 billion in an effort to boost its Medicaid offerings, and has realigned management to better fit with its growth opportunities.
Looking ahead, WellPoint sees non-GAAP earnings in the range of $7.30 to $7.40 a share on operating revenue of $60.7 billion, with year-end medical enrollment growing to 33.4 million.
The consensus is calling for earnings of $7.37 a share on slightly stronger sales of $61.07 billion.