--WellPoint expects decision on new CEO sometime in the first quarter
--Health insurer says 2012 earnings could be slightly above prior expectations
--Company expects to participate in exchanges in all states where it operates
(Adds comments from J.P. Morgan conference and more background throughout.)
By Jon Kamp
SAN FRANCISCO--Health insurer WellPoint Inc. (WLP) said Tuesday it is getting close to selecting a new chief executive and 2012 earnings may be near the high end or slightly above the company's prior expectations.
The Indianapolis-based company just wrapped up a challenging year. Former Chief Executive Angela Braly stepped down abruptly in August, a month after a rocky second-quarter report agitated investors who were already miffed about the company's unsteady performance.
WellPoint General Counsel John Cannon took over as interim CEO but also said he didn't want the top job on a permanent basis, and the health insurer's board has been searching for Ms. Braly's successor.
Speaking at the J.P. Morgan health-care conference Tuesday, Mr. Cannon said the insurance company expects to decide on a permanent CEO this quarter, "hopefully sooner rather than later."
The company gave its preliminary view of results for the just-concluded year in a regulatory filing ahead of Mr. Cannon's presentation. While WellPoint was cautious on its forecast in November--holding its adjusted earnings view of $7.30 to $7.40 a share in check despite posting a better-than-expected third quarter--the company said Tuesday that it may top that target.
Chief Financial Officer Wayne DeVeydt said in November that WellPoint was taking a conservative view amid investors' interest in seeing less volatility. But BMO Capital Markets noted Tuesday that Wall Street estimates have been drifting higher anyway.
The adjusted forecast excludes items like a tax adjustment and closing costs related to the recent purchase of Medicaid insurer Amerigroup.
Meantime, WellPoint also advised that 2013 is shaping up to be an investment year, with plans to pump $200 million to $300 million before taxes to invest in growth initiatives, such as the planned health-law exchanges and the burgeoning market for dual Medicare/Medicaid patients.
The company on Tuesday said it expects adjusted per-share earnings to "grow moderately" this year because of a lower share count amid relatively stable net income. The 2013 view includes Amerigroup integration costs.
The company closed on its $4.46 billion Amerigroup purchase two weeks ago. The deal created the largest Medicaid insurer while also lessening WellPoint's tilt toward individual and small-group commercial health insurance, which are markets expected to see the biggest impact from the U.S. health-care overhaul law.
Big features of the health law, like state-based exchanges where individuals can shop for coverage, are supposed to start up next year. Mr. Cannon said WellPoint expects to participate in exchanges in all of the states where it operates. He also said WellPoint is well-positioned for the coming changes.
"Many people fear health-care reform, and I may be smoking something, but I'm excited about it," Mr. Cannon said. "The government wants to make it work, and they need us to make it work."
--Joseph Walker and Saabira Chaudhuri contributed to this article.
Write to Jon Kamp at [email protected]
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