Coventry Health Care Earnings: Sees Second Quarter of Falling Profit

S&P 500 (NYSE:SPY) component Coventry Health Care Inc. (NYSE:CVH) reported its results for the third quarter. Coventry Health Care operates health plans, insurance companies, network rental, and workers’ compensation services companies.

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Coventry Health Care Inc. Earnings Cheat Sheet

Results: Net income for Coventry Health Care Inc. fell to $105.3 million (78 cents per share) vs. $122.7 million (83 cents per share) a year earlier. This is a decline of 14.2% from the year-earlier quarter.

Revenue: Rose 16.2% to $3.46 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Coventry Health Care Inc. beat the mean analyst estimate of 72 cents per share. Analysts were expecting revenue of $3.5 billion.

Quoting Management: “I am pleased with the Company’s strong third quarter results including the fifth consecutive quarter of membership growth, revenue growth of nearly $500 million from the prior year quarter, MLR improvement across all of the health plan businesses from the prior quarter, continued progress in the Kentucky Medicaid program, and successful implementation of SG&A initiatives driving a low cost operating structure,” said Allen F. Wise, chairman and chief executive officer of Coventry.

Key Stats:

The company’s net income has fallen in each of the last two quarters. In the second quarter, net income fell 59.1% from the year-earlier quarter.

The company has now beaten estimates the last two quarters. In the second quarter, it topped expectations with net income of 68 cents versus a mean estimate of net income of 64 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the fourth quarter has fallen from 73 cents per share to 71 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $2.83 a share to $2.74 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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