Shares of several health insurers sank Wednesday after WellPoint Inc. cut its 2012 earnings forecast and its second-quarter net income dropped more than 8 percent.
WellPoint, the nation's second-largest insurer after UnitedHealth Group Inc., said its enrollment slipped in the quarter. Companies cut jobs, reducing the number of people covered by employer-sponsored health insurance. WellPoint's medical costs also spiked in May. Although they returned to normal levels last month, WellPoint decided it was prudent to lower its forecast in case costs spike again later this year.
The insurer's new 2012 profit view of $7.30 to $7.40 per share was well below the $7.76 per share expected by analysts, according to FactSet. Its quarterly profit also fell short of Wall Street's forecast.
WellPoint's share price took the biggest hit in Wednesday afternoon trading. It slid $7.98, or 13 percent, to $53.44, its biggest one-day drop in more than three years.
Shares of UnitedHealth Group Inc., the nation's largest insurer, fell 4.2 percent, or $2.28, to $52.62. UnitedHealth said last week that enrollments grew in the second quarter, and raised its earnings forecast for the year.
Shares of Aetna Inc. fell 4.6 percent, or $1.71, to $35.36, Cigna Corp. dropped 3.1 percent, or $1.28, to $39.94, and Humana Inc. shed 2.4 percent, or $1.71, to $70.37. Broader markets were positive. The Standard & Poor's 500 index rose about 0.4 percent.
Aetna, Cigna and Humana have yet to report their second-quarter results.