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July 24, 2012 at 10:25 AM
WellPoint Inc., the nation’s second-largest health insurer, will report second-quarter results on Wednesday, nearly a week after competitor UnitedHealth Group Inc. saw its stock price slip despite posting a 5 percent increase in quarterly profit.
What to watch for
WellPoint, based in Indianapolis, took a $150-million hit last year when a Medicare Advantage plan it has since discontinued attracted more customers with a higher risk profile than the insurer expected. The insurer has said it expects more growth from the Medicare Advantage business this year, but investors also will be looking for more signs of trouble.
Medicare Advantage plans are privately run versions of the government’s Medicare program for the elderly and disabled people.
WellPoint saw its first-quarter earnings drop 8 percent earlier this year and said rising prices for care was the biggest factor driving up its expenses. Investors also will be looking for signs that expense growth is picking up steam.
UnitedHealth said Thursday its second-quarter net income climbed to $1.34 billion, or $1.27 per share, which beat Wall Street expectations, as enrollment gains helped revenue growth. But the insurer’s stock price fell more than 2 percent the day it released earnings.
Analysts largely chalked up the drop to a cautious tone delivered by UnitedHealth executives in a conference call after the earnings report was released. UnitedHealth leaders said they are seeing growing pressure on their Medicaid programs. Medicaid is the state-federal program that provides coverage for the needy, aged and disabled.
