WASHINGTON (dpa-AFX) - Coventry Health Care, Inc. (CVH) Friday reported a higher profit for its first quarter on membership growth. CEO Allen Wise said six of the company's seven core businesses performed either at or above expectations. The company also maintained its earnings forecast for fiscal 2012, while lifting its sales view.
The Bethesda, Maryland-based health insurer's first-quarter net earnings grew to $170.72 million or $1.20 per share from last year's $110.23 million or $0.73 per share.
The latest quarter results included earnings of $0.58 per share related to the release of Medicare Advantage Risk Adjustment Data Validation, or RADV, audit reserves.
Excluding the impact of the RADV prior period reserve release, earnings for the quarter were $88.3 million or $0.62 per share. On average, 17 analysts polled by Thomson Reuters expected the company to earn $0.62 per share. Analysts' estimates typically exclude special items.
Total operating revenues grew 21 percent to $3.69 billion from $3.05 billion in the prior-year quarter, while analysts were looking for revenues of $3.49 billion.
Total membership in the quarter was 5.26 million, an increase of 15.6 percent from last year, driven by growth across the company's government programs in Medicare Advantage, Medicare Part D, and Medicaid.
As of March 3, commercial risk membership declined 5 percent to 1.55 million partially due to large employer groups converting to self-funded.
Wise added that he is pleased with the Medicare growth and financial performance in the quarter, now representing about 30 percent of the company's total revenue.
Looking ahead, for fiscal 2012, Coventry Health continues to expect earnings per share of $3.10 to $3.30. Consolidated revenues are now projected in the range of $14.02 billion to $14.23 billion, higher than previous estimate of $13.86 billion to $14.05 billion. Analysts expect the company to earn $3.26 per share on revenues of $14.08 billion.
In fiscal 2011, net earnings were $3.70 per share, core earnings were $2.87 per share and operating revenues were $12.19 billion.
In pre-market activity, Coventry Health shares are currently trading at $32.70, up $0.02 or 0.06 percent.
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