Wednesday, WellCare Health Plans Inc. (WCG), a provider of managed care services for government-sponsored health care programs, reported a profit for the third quarter compared to a loss last year, helped by an increase in revenue. The company also revised its guidance for the full year 2009.
WellCare Health's third-quarter net income was $28.7 million or $0.68 per share, compared to net loss of $18.2 million or $0.44 per share in the same quarter last year.
Adjusted net income declined to $34.7 million or $0.82 per per share from $48.4 million or $1.15 per share in the prior year quarter, mainly due to the performance of Medicare Prescription Drug Plans, the increase in the Medicaid segment medical benefits ratio and the decrease in investment and other income.
On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.67 per share for the quarter. Analysts' estimates typically exclude one-time items. Total revenues for the quarter edged up to $1.67 billion from $1.64 billion in the comparable quarter last year. Analysts expected the company to report revenues of $1.66 billion for the quarter.
For the current quarter, premium revenue increased 2% year-over-year to $1.7 billion from $1.63 billion in the year ago period as medicare advantage and medicaid plan premium revenue increased, partially offset by a decrease in medicare PDP premium revenue.
Investment and other income declined 80% to $1.6 million from $8.1 million in the same quarter last year, primarily due to reduced market interest rates and lower average investment and cash balances.
The Tampa, Florida-based company's total expenses for the quarter was down to $1.62 billion from $1.68 billion in the year ago period. Adjusted SG&A expenses dropped to $186 million from $206 million resulting from lower sales and marketing costs, as well as improved operating efficiencies.
Medical benefits ratio increased by 230 basis point to 85.2% from an adjusted 82.9% in the prior quarter last year, driven largely by the performance of the Medicaid segment and Medicare Advantage private fee-for-service plans.
The company reported less intake for its membership plans in the current quarter. Total membership for the quarter edged down to 2.3 million from 2.5 million in the year ago period. Medicare stand-alone PDP membership decreased 22% year-over-year and medicare advantage membership was 240 thousand unchanged from the prior year.
However, Medicaid segment membership increased 2% year-over-year to 1.3 million, driven by growth in several markets and the addition of the Hawaii aged blind, and disabled program earlier in the year.
For the nine months ended, net income was $28.73 million or $0.68 per share compared to a loss of $5.74 million or $0.14 per share in the prior year. Adjusted net income was $106.75 million or $2.54 per share compared with $105.45 million or $2.51 per share last year. Year-to-date revenue was $5.25 billion, up from $4.92 billion in the prior year.
Looking ahead to the full year, the company expects adjusted net income in the range of $2.90 - $2.95 per share, compared to the prior guidance range of $2.75 - $2.95 per share. Premium revenue is expected to be in the range of $6.80 - $6.85 billion, compared to the prior guidance range of $6.75 billion - $6.85 billion. Analysts currently anticipate the company to earn $2.93 per share for the full year.
Heath Schiesser, president and chief executive officer said, "Our investments in infrastructure are strengthening service to our members, providers, and government clients. Nevertheless, our financial outlook for 2010 remains challenging, as we face declining membership in our Medicare segment and continue substantial investments to improve our capabilities and cost structure."
WCG is currently trading at $28.41, up $2.09 or 7.94% on a volume of 1.62 million shares on the NYSE.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.