"We remain optimistic about the long-term membership growth opportunity through exchanges,” Swedish said. “But given that we are just three weeks into the open enrollment period, it is really too early to draw any definitive conclusions.”
Ignoring one-time factors, WellPoint's profits for the third quarter were $2.10 per share. That's almost identical to per-share profits of $2.09 from the same period in 2012. It was also well above analysts' predictions of $1.82 per share, according to a survey by Thomson Reuters.
WellPoint boosted its projections for per-share profits for the full year of 2013 to $8.40. That's up from $8 predicted previously.
Initial investor reaction to the earnings report was tepid. Shares of WellPoint were trading at just over $85 as of late Wednesday morning, a drop of roughly 3.5% since markets opened. But overall the company's share price is up more than 40% since the start of the year.
WellPoint reported health plan membership of 35.5 million individuals in the third quarter. That was an increase of 2 million customers, or 6%, from the same period in 2012. That boost was largely due to last year's $4.46 billion acquisition of Medicaid managed-care insurer Amerigroup Corp., which added 2.4 million customers to WellPoint's base. That increase was partially offset by a decline in enrollment of more than 400,000 individuals in the commercial and Medicare sectors.
Total revenue for the third quarter was $17.7 billion, an increase of 17.2% over the prior-year quarter. That boost was also largely due to the acquisition of Amerigroup, according to WellPoint.
Last week, UnitedHealth Group, the country's largest health insurer by subscribers, reported increased profits of 1% in the third quarter of 2013 compared to the same period last year. But the company's performance failed to meet analysts' expectations. That has driven UnitedHealth's stock price lower in the last week. Other major publicly traded insurers—Aetna, Humana and Cigna Corp.—have yet to release their third-quarter earnings.
On the earnings call, WellPoint executives indicated that the rocky rollout of the healthcare exchanges was not unexpected given the complexities of the federal healthcare law and the significant changes in the marketplace. Eventually, they said, the Patient Protection and Affordable Care Act is expected to create many new customers for WellPoint and other insurers.
“We knew that there would be some choppiness going in,” said Ken Goulet, president and CEO of WellPoint's commercial and specialty division. “We're not at all surprised by the initial activity."
