WellChoice, the parent of Empire Blue Cross and Blue Shield, New York, said its first-quarter net income fell 39% -- to $47.7 million, or 57 cents per share -- because of income taxes, which the company didn't have to pay before becoming for-profit in an initial public offering in November 2002. WellChoice earned $78.6 million in the first quarter of 2002. Revenue remained virtually flat at $1.3 billion, while membership grew 2% compared with the year-ago quarter, to 4.8 million. The company reiterated its 2003 earnings outlook of $2.17 per share to $2.22 per share. Administrative costs rose 9% to $209.8 million, including $10 million in new taxes. The company's medical cost ratio, or the share of premium dollars spent on medical claims, was 85.7%, compared with 87.2% in the year-ago quarter. Separately, WellChoice announced the promotion of Gloria McCarthy to COO. McCarthy, 50, has worked for the company for more than 29 years, serving as senior vice president of operations for managed care and Medicare services since 1997. -- by Laura B. Benko
New for-profit WellChoice cites taxes in profit drop
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