Health insurer WellPoint Inc posted higher-than-expected quarterly profit on Wednesday, but its shares dropped 4.1 percent as revenue missed analysts' estimates and the company failed to increase its full-year earnings forecast.

While WellPoint joined a string of U.S. health insurers whose second-quarter earnings topped estimates, rivals have also given improved outlooks for the year.

WellPoint's unchanged outlook may come as a slight disappointment, Wells Fargo analyst Matt Perry said in a research note. He also said the insurer's enrollment declines were steeper than expected.

Investors may also be seeking to lock in profits after WellPoint shares have had a strong run this year, rising 29 percent through Tuesday.

Shares of health insurers rose sharply across the board on Tuesday, amid optimism about health reform legislation excluding plans for a government-run option and positive earnings reports.

Net income at WellPoint, the largest U.S. health insurer by membership, fell to $693.5 million, or $1.43 per share, from $750.5 million, or $1.44 per share, a year earlier.

Excluding net investment losses, earnings of $1.50 a share were 7 cents ahead of the analysts' average forecast, according to Reuters Estimates.

Revenue slipped 1.4 percent to $15.27 billion, below the $15.41 billion that analysts expected.

Enrollment stood at 34.2 million at the end of June, down 3 percent from a year earlier. Widespread job losses have pressured the employer-based enrollment of WellPoint and other health insurers.

Profit in WellPoint's consumer business soared 67.7 percent, primarily stemming from operating improvements in its seniors business.

WellPoint spent 82.9 percent of its premium revenue on medical costs, down from 83.3 percent a year earlier. The company now expects medical costs to amount to about 82.9 percent of premium revenue for the year, up from its prior view of about 82.7 percent. Wall Street watches this measure closely as a gauge of profitability.

The company projected 2009 earnings of $5.06 to $5.12 per share, including net investment losses of 54 cents, which is equivalent with its prior outlook.

Investors may view WellPoint as continuing to be conservative in light of the political and economic environment, Goldman Sachs analyst Matthew Borsch said in a research note.

UnitedHealth Group and Coventry Health Care have posted better-than-expected results this reporting season and given rosier financial forecasts for the year.

WellPoint shares fell to $52.14 in premarket trading from Tuesday's close of $54.38 on the New York Stock Exchange.

(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn)

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