WellPoint Inc posted a quarterly profit far above analyst estimates, helped by health plan membership gains and lower-than-expected medical costs, and the insurer raised its full-year earnings outlook.

The strong results on Wednesday from the largest U.S. health insurer by membership came after rivals UnitedHealth Group Inc and Humana Inc also increased their full-year forecasts in the past week in the latest signs of improving prospects for the industry.

WellPoint shares rose 1 percent.

It was a great quarter. I still think guidance looks a little bit conservative, Wedbush Securities analyst Sarah James said. They had some great volume growth here, some great national account sales. I think that was very impressive.

WellPoint's first-quarter net income rose to $926.6 million, or $2.44 per share, from $876.8 million, or $1.96 per share, a year earlier.

Excluding items, earnings of $2.35 per share were 48 cents above the analysts' average estimate, according to Thomson Reuters I/B/E/S.

Analysts were encouraged by the company's results given new spending rules, created by last year's healthcare overhaul.

WellPoint is a big provider of individual health plans, which are particularly affected by the new rules. They require insurers meet certain thresholds, known as medical loss ratios (MLRs), for spending on medical care as opposed to administration and profit.

Given WellPoint's commercial exposure and concerns about the minimum MLR regulations, we are pleasantly surprised at the company's ability to expand margins, Leerink Swann analyst Jason Gurda said in a research note.

Revenue fell 1.3 percent to $14.65 billion. Analysts looked for $14.57 billion.

Membership totaled nearly 34.2 million at the end of March, up 1.1 percent. It was up 2.6 percent from the end of 2010, driven by growth in national plans that serve large employers.

Health insurer results generally have been benefiting from moderate use of healthcare, as Americans stay away from doctors' offices to save money during the shaky economy. WellPoint said a weaker-than-anticipated flu season and the winter storms kept its medical costs low.

The insurer said it spent 82.1 percent of its premiums on medical costs, up from 81.8 percent a year ago. However, Goldman Sachs analysts expected it to rise to 83.7 percent.

WellPoint projected full-year earnings of at least $6.70 per share, up from its expectation given in January of at least $6.30. Analysts have been looking for $6.62.

Several analysts noted that WellPoint was likely being conservative with its new forecast, given the increase to its full-year outlook was less than the magnitude of its first-quarter outperformance.

WellPoint shares rose 1 percent to $73.70 in premarket trading. Through Tuesday, WellPoint shares have risen 28 percent this year. Health insurer stocks have outperformed the broader market in 2011 as investors become more comfortable with the last year's U.S. healthcare overhaul.

(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn, Dave Zimmerman)