Health insurer Wellpoint Inc WLP.N said its 2013 adjusted profit would be "relatively stable" compared with 2012 earnings as it positions itself for reforms to the U.S. health care system.
The company also said it would buy back more shares this year, leading to moderate growth in per-share earnings compared with 2012, which it said may top its previous expectations.
Wellpoint said during the JP Morgan healthcare conference on Tuesday that it anticipates a shift toward more government-sponsored business to boost its patient volumes.
"Rather than fearing this new market, we are embracing it," Wellpoint Interim Chief Executive John Cannon told investors in remarks that were webcast.
For 2012, the second-largest U.S. health insurer said it expects earnings, excluding one-time items, near the high end or slightly above its prior guidance of $7.30 to $7.40 per share.
It said that due primarily to a tax gain, 2012 net earnings would surpass the $7.37 to $7.47 per share it had previously forecast.
Analysts had expected adjusted earnings of $7.46 per share for 2012 and $8.01 per share for 2013, according to Thomson Reuters I/B/E/S.
Wellpoint is well positioned to capitalize on health reform, Cannon said, and benefit from state health exchanges due to a strong presence in local markets. A large presence in California, New York, Texas and Florida will allow the company to take advantage of a developing market for people who are part of both the Medicare program for the elderly and Medicaid for poor people.
Cannon said 2013 will be a year of investing for growth. The company is targeting a compound annual growth rate of 10 to 14 percent over the next five years, he said. Organic growth will contribute 4 to 6 percent, acquisitions will add 2 to 3 percent, and share repurchases will add 4 to 5 percent, Cannon said.
"Frankly, organic growth has been our challenge in recent years," he said.
Aetna Inc (AET.N), also due to make presentations at the conference on Tuesday, said after the market closed on Monday that its guidance for 2012 and 2013 profit and revenue growth remain on track.
Aetna and Wellpoint are in the forefront of healthcare reform. The market for insurance will change with the start of healthcare exchanges later this year and the expansion of Medicaid insurance for the poor in 2014. The changes are expected to add 30 million people to the ranks of the insured over the next decade.
(Reporting by Caroline Humer in New York and Susan Kelly in Chicago; Editing by Chizu Nomiyama and John Wallace)