(Reuters) - WellPoint Inc WLP.N posted a higher-than-expected third-quarter profit on Wednesday on strong membership gains, and the health insurer raised its full-year profit forecast.
WellPoint also projected that profit would rise next year from its newly increased 2011 forecast.
Quarterly net income fell to $683.2 million from $739.1 million a year earlier. Earnings per share rose to $1.90 from $1.84 a year before, when the company had more outstanding shares.
Excluding investment gains, earnings of $1.77 per share were 9 cents ahead of analysts’ average estimate, according to Thomson Reuters I/B/E/S.
Revenue rose about 6 percent to $15.16 billion.
Medical enrollment stood at about 34.4 million, up 2.6 percent from a year earlier. The company reported gains in its plans serving large and small employers, while increases in its Medicare plans were helped by its acquisition of CareMore Health Group.
WellPoint spent 85.1 percent of its premium revenue on medical claims, more than 83.8 percent a year before. The ratio, which is closely watched as an indicator of profitability, was better than the 86 percent expected by Wells Fargo analyst Peter Costa.
Health insurers have seen their claim costs stay low during the weak economy as Americans avoid doctor visits and procedures.
WellPoint projected 2011 earnings in a range of $7.18 to $7.28 per share. Excluding net investment gains, the forecast is $6.90 to $7.00 per share, up from its prior range of $6.75 to $6.95.
Analysts have been looking for $7.07.
Reporting by Lewis Krauskopf in New York; Editing by Lisa Von Ahn and Gerald E. McCormick