(Updates with closing shares in fifth paragraph.)
April 30 (Bloomberg) -- WellPoint Inc., the second-biggest U.S. health insurer, increased its profit forecast after Obamacare enrollments boosted quarterly results.
The people signing up are younger than earlier anticipated, making the Indianapolis-based company’s earlier prediction of “double-digit” rate increases next year less likely. Full-year net income is now expected to be more than $8.50 a share, WellPoint said in a statement today.
First-quarter medical enrollment rose by 1.3 million from the prior three-month period as WellPoint benefited from new customers through the exchanges created by Patient Protection and Affordable Care Act. WellPoint has the highest share of enrollments of insurers through Obamacare, saying today that it has signed up 400,000 on government exchanges through Feb. 14.
“Obamacare is a very important piece of WellPoint’s growth story,” said Ana Gupte, an analyst with Leerink Partners in a phone interview from New York. “They’ve grown a lot, and they continue to grow further on public exchanges and Medicaid expansion.”
WellPoint rose 5.6 percent to $100.68 at the close in New York. The shares gained 38 percent in the past 12 months.
WellPoint said it now expects 600,000 enrollments through the public exchanges this year.
The average age of enrollment has come down “each day in a meaningful fashion,” Chief Executive Officer Joseph Swedish said on a conference call. That means double-digit rate growth is less likely and will vary market to market.
Younger customers tend to less expensive for health insurers, seeking fewer medical services.
First-quarter earnings excluding one-time items of $2.30 a share beat the $2.08 average of 19 analyst estimates compiled by Bloomberg. The company previously forecast full-year net income of more than $8.20 a share.