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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