(RTTNews) - Diversified managed healthcare company Coventry Health Care Inc. (CVH: News ) posted a decline in third-quarter profit, as it recorded a $26.7 million charge related to its First Health Services Corp. divestiture. Further, the company lifted its earnings forecast for the full year.

The Bethesda, Maryland-based company's third-quarter net income was $70.6 million or $0.48 per share, compared to $85.5 million or $0.58 per share in the year-ago quarter.

Net income from continuing operations advanced to $100.4 million or $0.68 per share from $78.9 million or $0.53 per share in the same quarter of last year.

Excluding the impact of the First Health Services Corp. or FHSC divestiture in the third quarter, which resulted in a net charge of $26.7 million, or $0.18 per share, adjusted net earnings were $97.3 million or $0.66 per share.

On average, 18 analysts polled by Thomson Reuters expected the company to post earnings of $0.54 per share. Analysts' estimates typically exclude special items.

The company noted that the adjusted earnings of $0.66 per share include earnings from continuing operations of $0.68 per share and a loss of $0.02 per share from FHSC operations during the quarter.

Quarterly operating revenues totaled $3.44 billion, an increase from the previous year's operating revenue of $2.93 billion. Fourteen Wall Street analysts had a consensus revenue estimate of $3.47 billion for the quarter.
Allen Wise, chairman and chief executive officer of Coventry, said, "I continue to be pleased with the Company's financial and operational results for 2009 including today's increase to full year EPS guidance. In the face of a challenging environment, we feel confident that focusing on our seven core businesses and driving a low cost structure will best position Coventry for the future."

Managed care premiums increased to $3.15 billion from $2.63 billion in the prior-year quarter, while revenues from management services totaled $290.9 million, down from $298.4 million in the comparable quarter of the previous year.

The company noted that the operating earnings, as a percentage of total revenues, dropped to 4.4% from $5.3% a year earlier, as the company recorded total operating expenses of $3.29 billion, up from $2.77 billion incurred in the same quarter of last year. Medical costs, a major operating expense, grew to $2.66 billion from $2.20 billion last year.

For the quarter, Coventry Health reported continued growth in Medicare products, with Medicare Coordinated Care Product or CCP membership growth of 38% from last year. Commercial premium yields rose to $304.13 per member per month in the quarter, up 6.1% from the year-ago quarter.

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