The 10-second takeaway
For the quarter ended March 31 (Q1), WellPoint missed slightly on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue increased significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share increased.
Margins contracted across the board.
WellPoint tallied revenue of $17.55 billion. The 15 analysts polled by S&P Capital IQ foresaw sales of $17.89 billion on the same basis. GAAP reported sales were 15% higher than the prior-year quarter's $15.42 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $2.94. The 18 earnings estimates compiled by S&P Capital IQ forecast $2.38 per share. Non-GAAP EPS of $2.94 for Q1 were 26% higher than the prior-year quarter's $2.34 per share. GAAP EPS of $2.89 for Q1 were 14% higher than the prior-year quarter's $2.53 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 22.3%, 130 basis points worse than the prior-year quarter. Operating margin was 8.1%, 110 basis points worse than the prior-year quarter. Net margin was 5.0%, 60 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $17.96 billion. On the bottom line, the average EPS estimate is $2.13.
Next year's average estimate for revenue is $71.70 billion. The average EPS estimate is $7.81.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 949 members out of 1,009 rating the stock outperform, and 60 members rating it underperform. Among 326 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 316 give WellPoint a green thumbs-up, and 10 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on WellPoint is outperform, with an average price target of $71.69.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends WellPoint. The Motley Fool owns shares of WellPoint. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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