EmailWellPoint (WLP $55.00 -6.38) reported second quarter earnings of $2.04 per share, excluding non-recurring items, $0.03 worse than the Capital IQ consensus of $2.07, while revenues rose 2.0% year/year to $15.17 billion versus the $15.3 billion consensus. The company lowered EPS guidance for fiscal year 2012 with EPS of $7.30-7.40 from prior guidance of at least $7.57, excluding non-recurring items, versus the $7.76 consensus. "While our second quarter EPS results improved from the prior year and are ahead of our plan through the first six months, the combination of lower enrollment and slightly higher medical cost trends are driving a reduction in our full year 2012 outlook.
We are disappointed with the need to lower our guidance, but believe it is the right action to take, given the challenging market we see, our commitment to maintaining pricing discipline and our intention to continue investing for the strong future growth opportunities ahead of us..."Our revised 2012 outlook reflects the impact of anticipated financing for the pending Amerigroup acquisition, as well as lower commercial insured enrollment and higher medical cost trend experience. In the second quarter, we saw an uptick in medical cost trend, most notably in outpatient and physician visits. While we currently believe full year 2012 medical cost trend will be within our expected range of 7.0 percent, plus or minus 50 basis points, we believe it will more likely trend towards the upper half of the range." Medical enrollment totaled 33.5 million members at June 30, 2012, a decrease of 639,000 members, or 1.9 percent, from approximately 34.2 million at June 30, 2011."
