WellPoint Shares Drop on Rise in Expenses

Woodland Hills-based WellPoint Health Networks Inc. shares fell 10%, partly on concerns that the managed-care firm’s medical expenses rose more than analysts expected. WellPoint shares fell $5.50 to $47.69 on the New York Stock Exchange. The stock fell even after WellPoint reported that third-quarter earnings rose 23%, to $55.6 million from $45.1 million. Revenue rose 34%, to $1.51 billion from $1.13 billion. But analysts were concerned that WellPoint’s cost of providing medical coverage to members rose from 82.7 cents per $1 paid in premiums during the latest quarter, from 81.4 cents the prior quarter. “The slight increase left people concerned that there are problems there,” Peter Costa, analyst at ABN Amro Chicago Corp., told Bloomberg News. WellPoint Chairman Leonard D. Schaeffer attributed some of the decline to general stock market turbulence, including the dramatic 60% drop in the stock of industry star Oxford Health Plans earlier this week. “Timing is everything,” Schaeffer said.