WellPoint (NYSE:WLP) reported softer first-quarter earnings on Monday but raised its already bullish full-year outlook as ObamaCare continued to trigger increases in enrollment.
The Indianapolis-based health insurer reported net income of $701 million, or $2.40 a share, down from a year-earlier profit of $885.2 million, or $2.89.
Excluding one-time items, WellPoint said it earned $2.30 a share, below an adjusted $2.94 last year as it struggled under reform costs related to the new healthcare law.
However, the results topped average analyst estimates of $2.12 in a Thomson Reuters poll as the No. 2 benefits manager by revenue tightened spending in other areas and benefited from a decline in doctor's visits.
Revenue for the three-month period increased 1.2% to $17.6 billion, below the Street’s view of $17.96 billion. Gains were triggered by increases in medical enrollment, which grew by 3.6% or 1.3 million members sequentially to 36.9 million as of March 31, as well as higher premiums.
WellPoint, which operates Anthem and Empire Blue Cross Blue Shield plans, said it now expects enrollment to increase by 1.3% to 1.4% for the full year – including more than 600,000 new members from ObamaCare exchanges.
"Our membership is growing across our platforms and we are pleased with the progress we have seen in the exchanges,” WellPoint CEO Joseph Swedish said in a statement.
The company raised its fiscal 2014 outlook, now anticipating non-GAAP earnings of greater than $8.50 a share, which would top the current consensus view of $8.40. It expects revenues to exceed $73.5 billion, compared with the Street’s view of $73.18 billion.
Last week, Aetna (NYSE:AET) beat top-and-bottom line expectations. Larger rival UnitedHealth (NYSE:UNH) posted an earnings beat, but just missed on the top line.