WellPoint shares restrained by cost ratios MarketWatch
Excluding one-time adjustments, WellPoint would have recorded earnings of $1.95 a share against the $1.62 posted in the year-ago period. Analysts polled by FactSet Research had expected the company to report adjusted earnings of $1.64 a share on sales of $14.66 billion.
WellPoint said it expects full-year earnings to be "at least" $6 a share for the full year. The FactSet estimate is for $6.09.
WellPoint shares jumped 3.4% to $57.81 in afternoon trades.
The company said that its medical-loss ratio, or the percentage of revenue spent providing medical care, was 81.8% in the first quarter, down from 82.5% in the first quarter of 2009.
While that normally indicates increased efficiency on WellPoint's part, an improved cost ratio has haunted the nation's largest health insurers of late. Health-care reform legislation is expected to force insurers to increase the amount they spend on medical care to 85% for commercial plans and 80% for individual plans. Indeed, WellPoint said it expects its benefit ratio to reach 84.3% by year's end.
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