) rose 0.6% to $91.35 on Jan 14, after the company raised its
earnings per share guidance for full-year 2013. The market
reaction apparently suggest that the projection was within market
Accordingly, WellPoint now expects operating net income to be
$8.52 per share, higher than the prior estimate of $8.40 a share.
Operating earnings per share excludes net realized gains of 58
cents and tax benefit of 21 cents, more than offset by impairment
losses on investments of 21 cents, loss of extinguishment of debt
of 31 cents, acquisition-related costs of 5 cents and impairment
charges related to 1-800 Contacts of 54 cents.
However, including these charges, reported net income per
share is now projected to be at $8.20, lower than at least $8.45
forecasted in Oct 2013. Nonetheless, WellPoint continues to
anticipate medical enrollment slightly over 35.6 million members,
operating revenue within $70-72 billion, operating cash flow of
about $3.0 billion and SG&A expense ratio within 14-14.5%,
Meanwhile, the Zacks Consensus Estimate for 2013 is pegged at
$8.53 per share, a cent higher than WellPoint's raised guidance.
The Zacks estimate rose 2 cents in the last 7 days, following the
announcement of divestitures of WellPoint's online contact lens
retail subsidiary 1-800 Contacts to Thomas H. Lee Partners and
another eye glasses business - glasses.com to one of the premium
eyewear companies, Luxottica Group. The deals await regulatory
approval and is scheduled to close in the first quarter of
While WellPoint foresees charges of 52-57 cents per share
related to the divestitures, these will likely help the company
centralize its operations, thereby focusing on core
Furthermore, as WellPoint has delivered positive earnings
surprises in all the last four quarters, with an average beat of
18.1%, it is likely that the company may outperform estimates
even in the fourth quarter and full-year of 2013. The company is
scheduled to release the results before the opening bell on Jan
WellPoint currently carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the healthcare space include
HCA Holdings Inc.
VCA Antech Inc.
). All these stocks carry a Zacks Rank #2 (Buy).
HCA HOLDINGS (HCA): Free Stock Analysis
LCA-VISION INC (LCAV): Free Stock Analysis
WELLPOINT INC (WLP): Free Stock Analysis
VCA ANTECH INC (WOOF): Free Stock Analysis
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