* Says 2012 adjusted profit may beat previous forecast
* Sees share buybacks boosting 2013 earnings
* Says CEO decision expected this quarter
* Wellpoint, Aetna both see growth in government program
Jan 8 Health insurer Wellpoint Inc 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
Analysts had expected adjusted earnings of $7.46 per share
for 2012 and $8.01 per share for 2013, according to Thomson
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
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, but we are confident that this target can be achieved,"
Cannon, who became interim CEO at Wellpoint after the abrupt
departure of Angela Braly in August following investor
dissatisfaction with the health insurer's financial performance,
also reiterated that a decision on a permanent chief is expected
Aetna Inc, whose CEO also spoke 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 with its earlier forecast. Analysts, however, had been
projecting stronger profit in 2013, and the company's shares
fell more than 3 percent on Tuesday.
Aetna looks to substantially increase government program
revenue and profit over the next several years, Chief Executive
Mark Bertolini told investors.
Over the longer term, Aetna is targeting low double-digit
operating EPS growth on average, he said.
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.
Shares of Wellpoint closed up 33 cents, or less than 1
percent, at $60.07 Tuesday on the New York Stock Exchange.
Shares of Aetna fell $1.58, or 3.44 percent, to close at $44.38.