INDIANAPOLIS (AP) — WellPoint Inc.'s second-quarter net income jumped 24 percent, as an acquisition boosted revenue and a lower-than-expected increase in medical costs helped the nation's second-largest health insurer.
The performance topped Wall Street's earnings expectations and prompted the insurer to raise its forecast for 2013.
WellPoint's stock then climbed more than 2 percent, or $1.99, to $89.50 Wednesday before markets opened.
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Shares closed Tuesday at $87.51, WellPoint's highest closing price since January 2008, according to FactSet. WellPoint's shares price is up nearly 44 percent so far this year.
The Indianapolis company earned $800.1 million, or $2.64 per share, in the three months that ended June 30. That's up from $643.6 million, or $1.94 per share, a year ago.
Operating revenue soared 16 percent to $17.6 billion. That excludes investment gains or losses.
Adjusted earnings were $2.60 per share.
Analysts expected adjusted earnings of $2.08 per share, on $17.81 billion in revenue, according to FactSet.
WellPoint said Wednesday its enrollment rose more than 6 percent to about 35.7 million people, thanks to last year's $4.46 billion acquisition of Medicaid coverage provider Amerigroup Corp. The roughly 2.6 million members it gained in that deal helped counter declines in the insurer's commercial and Medicare businesses.
Medicaid and Medicare are government funded programs that provide health coverage for poor, elderly and disabled people.
WellPoint now expects full-year earnings of at least $8 per share, not counting one-time items like investment gains or losses. That's up from its previous forecast for $7.80 per share.
Analysts expect, on average, earnings of $8.03 per share.
In last year's quarter, medical costs came in about $50 million higher than WellPoint expected in May. The insurer then reported an 8 percent drop in earnings and cut its forecast for 2013. A month later, former CEO Angela Braly resigned. Her replacement, Joseph Swedish, started at the end of this year's first quarter.
WellPoint ranks second in size to UnitedHealth Group Inc., which also reported enrollment gains and a better-than-expected second-quarter performance last week.
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