In the battle of large-cap insurance carriers, WellPoint (NYSE:WLP) threw down the gauntlet yesterday, with a Q4 profit that slightly topped analysts' estimates.

The company's earnings release comes just days after competitor UnitedHealth Group (NYSE:UNH) also reported strong earnings -- but warned that an ongoing accounting restatement could add expenses pertaining to its accounting treatment of stock options. Rivals Aetna (NYSE:AET) and Cigna (NYSE:CI) are set to offer their respective earnings releases the week after next.

WellPoint's revenue and net income numbers were fairly impressive. On a per-share basis, net income increased by 23% from the company's 2005 Q4. Excluding the impact of a large acquisition at the end of 2005, WellPoint's 2006 Q4 operating revenue increased by 12% year over year. Management attributed the improvement to disciplined pricing, enrollment in WellPoint's Medicare Part D products, and a New York state prescription drug contract the company won in 2006.

The earnings release included several more positive facts. Enrollment increased by 467,000 members, or 1.4%, from the prior year. In addition, the company spent $550 million during its fourth quarter to repurchase 7.3 million of its own shares. For all of fiscal 2006, the company spent $4.6 billion to repurchase 60.7 million shares.

The one main drawback to the company's growth has been an increased benefit expense ratio. On a comparable basis, the company's benefit expense ratio in the fourth quarter increased 50 basis points year over year, from 80.6% to 81.1%. The increase resulted from a slight shift in business mix, which included growth in programs that have higher benefit expense ratios than the company average. These included its Federal Employee Program business and other state-sponsored programs.

All in all, the results for the company's Q4 are favorable. The company's large, consistent share repurchases are a positive trend for shareholders. WellPoint continues to demonstrate that it can churn out double-digit revenue growth and maintain its pricing power for premiums. While the increased benefit expense ratio might concern some, it's not surprising, given the growth in lower-margin business segments. I still believe that WellPoint is right on track to meet its forecasted 2007 earnings. On a per-share basis, they're expected to show a 14.7% improvement over 2006.

UnitedHealth is both an Inside Value and a Stock Advisor recommendation. Try out these or any of our investing newsletter services free for 30 days.

Fool contributor Billy Fisher has no financial interest in any stocks mentioned. The Fool has a disclosure policy.