WellPoint Inc (NYSE:WLP), the second largest health insurance provider in the United States, increased its earnings guidance for 2014 citing the growth of new customers through the Patient Protection and Affordable Care Act – popularly known as Obamacare.
Exchanges tracking general expectations
“We are building on the positive operating momentum we’ve achieved across the organization over the last year. While it is early in 2014, we are encouraged by results thus far across our businesses and we believe Exchanges are tracking our general expectations,” according to Joseph Swedish, chief executive officer of WellPoint Inc (NYSE:WLP).
WellPoint new earnings guidance
WellPoint Inc (NYSE:WLP) expected that its earnings for the current fiscal year will be higher than $8.20 per share. The company previously estimated that it will be able to generate earnings of more than $8.00 per share. Wall Street analysts predicted that the health insurance provider will be able to deliver earnings of around $8.39 per share based on the average estimate from data compiled by Bloomberg.
The health insurance provider estimated to add approximately 1 million to 1.3 million new customers this year. WellPoint Inc (NYSE:WLP) previously anticipated an additional 500,000 new customers since Obamacare enrollment began in October last year.
Outlook remains prudent
According to Swedish, the current outlook provided by WellPoint Inc (NYSE:WLP) is still “prudent in light of the dynamic nature if the marketplace.” He added, “We believe this is a point from which we will grow in the future. We have entered a period of tremendous change across the health care system and are confident that WellPoint has the leadership, assets and strategy to drive profitable growth over the next several years.”
During the investor meeting in New York today, Swedish said the health insurance provider will continue to pursue the growth of its membership under the Medicare and Medicaid program of the government. He said, “There’s an explosion in the government business.”
On the other hand, Ken Goulet, executive vice president of commercial and specialty business at WellPoint Inc (NYSE:WLP) expressed optimism regarding the company’s standing or achievement on the exchanges. He said the average age of enrollment “came in right where we expected it to be.”
Commenting on the earnings forecast of the health insurance provider, Carl McDonald, an analyst at Citigroup Global Markets opined that “it might not be enough to satisfy expectations.” He added, “There doesn’t appear to be any industry implications from the guidance raise, since it seems mostly attributable to the impact of the 1-800 Contacts sale and the ensuing share repurchase.”