The company earned $1.16 per share in the fourth quarter as opposed to $1.34 in the year-ago quarter. The Zacks Consensus Estimate for the quarter was $1.02. For the full-year 2009, Well Point earned $6.09 which was above the year-ago earnings of $5.48 and the Zacks Consensus Estimate of $5.91.
Total operating revenues for the quarter came in at approximately $15.1 billion as opposed to $15.4 billion in the year-ago quarter. The decrease was primarily attributable to lower fully insured enrollment in 2009, partially offset by the rise in premium rate. Total operating revenues for 2009 came in at approximately $60.83 billion as opposed to $61.58 billion in 2008.
Operating gains for the Commercial Business segment decreased 56.5% to $316.8 million in the reported quarter. The decline was due to restructuring costs incurred by WellPoint in addition to a reduction in fully insured enrollment and an increase in the benefit expense ratio for the Local Group business. Operating gains for the Consumer Business segment fell 32.6% to $158.9 million in the quarter. The Other segment reported a 15.7% year-over-year increase in operating gains.
The health insurer completed the sale of NextRx subsidiaries to Express Scripts, Inc (ESRX) on Dec 1, 2009 and received consideration of $4.7 billion from the transaction and recognized a pre-tax gain on the sale totaling $3.8 billion in the reported quarter.
We were disappointed to see a significant decline in medical enrollment. Medical membership came in at 33.7 million as of Dec 31, 2009, which represented a decrease of 3.9 % from Dec 31, 2008. Medical expenses also climbed during the quarter to a benefit-expense-ratio of 84.8% from 83.4% in the year-ago quarter.
The membership decline was most significant in the Local Group business, which saw a 989,000 member decline from the prior-year period. The decrease in membership in this segment was primarily attributable to lapses and in-group enrollment losses arising from the recession and the consequent rise in unemployment.
Enrollment in State Sponsored business witnessed a decrease of 259,000, as WellPoint withdrew from certain State Sponsored programs. Membership declines were also experienced in the Individual and Senior businesses, while enrollment in the National business grew by 101,000 members. Medical enrollment is expected to decline further because of the continuous rise in unemployment. Operating cash flow for the entire 2009 was more than $3.0 billion.
WellPoint expects to earn at least $6 a share in 2010. The Zacks Consensus Estimate for 2010 is $6.10. Currently, we are Neutral on WellPoint shares.
Posts
1 comment:
Pak Karamu visiting your blog
Post a Comment