Diversified managed healthcare company Coventry Health Care Inc. (CVH) on Tuesday posted higher profit for the fourth quarter, reflecting a 15.2% growth in revenues. Further, the company issued a financial forecast for the full year 2010.
The Bethesda, Maryland-based company's fourth-quarter net income was $109.1 million or $0.74 per share, compared to $88.2 million or $0.60 per share in the year-ago quarter.
On average, 17 analysts polled by Thomson Reuters expected the company to post earnings of $0.56 per share. Analysts' estimates typically exclude special items.
Quarterly total operating revenues advanced 15.2% to $3.43 billion from the previous year's revenue of $2.98 billion. Thirteen Wall Street analysts had a consensus revenue estimate of $3.49 billion for the quarter.
Allen Wise, chairman and chief executive officer of Coventry, said, "I am pleased with the progress that the Company has made during 2009 including a strong finish to the year in the fourth quarter. Although we continue to operate in a challenging economic environment, as we enter 2010 we remain confident that our focus on Coventry's seven core businesses will best position us for the future."
Managed care premiums for the latest quarter increased to $3.12 billion from $2.67 billion a year ago, and Management services revenue rose slightly to $306.6 million from the prior-year's $305.3 million.
The company noted that operating earnings, as a percentage of total revenues, improved to 5.4% from 4.0% a year earlier, as the company reported total operating expenses of $3.24 billion, up from $2.86 billion incurred in the comparable quarter of the previous year. Medical costs, a major operating expense, grew to $2.598 billion from $2.237 billion in the year-ago period.
For the quarter, Coventry Health reported continued growth in Medicare products, with Medicare Coordinated Care Product or CCP membership growth of 36% from last year. Commercial group risk premium yields rose to $306.75 per member per month in the quarter, up 5.9% from the year-ago quarter.
Medicare Advantage membership increased to 515 thousand as of December 31, 2009, an increase of 135 thousand members from the year-earlier period. Also, Medicare Advantage CCP membership was 186 thousand, an increase of 49,000 members from the prior year.
As of December 31, 2009, Medicare Part D membership was 1.68 million, an increase of 752,000 members from the prior year.
For the full year 2009, the company reported net income of $242.3 million or $1.64 per share, compared to $381.9 million or $2.54 per share in 2008.
Income from continuing operations declined to $315.3 million or $2.14 per share from $362 million or $2.41 per share in the previous year. Analysts expected earnings of $2.02 per share for the full year.
Annual operating revenues for fiscal 2009 were $13.9 billion, up from $11.7 billion reported in the year ended December 31, 2008. Fourteen Wall Street analysts expected revenue of $14.04 billion for fiscal 2009.
Looking ahead, the company projects fiscal 2010 earnings to range between $2.10 and $2.25 per share, on consolidated revenue of $10.86 billion - $11.37 billion. Management services revenue is expected to be in the range of $1.12 billion - $1.17 billion, and risk revenue of $9.74 billion - $10.20 billion. Analysts are looking for earnings of $2.23 per share on revenue of $11.21 billion for fiscal 2010.
Among Coventry Health Care's rivals, Aetna Inc. (AET) posted lower fourth-quarter profit totaling $165.9 million or $0.38 per share as compared with $194.7 million or $0.42 per share in the year-ago quarter, hurt by higher medical costs. However, revenues rose 9% to $8.76 billion from $7.76 billion in the previous year, reflecting a 9% increase in premium revenue and a 2% rise in fees and other revenues.
Another peer, WellPoint Inc. (WLP) reported a surge in fourth-quarter profit that totaled $2.74 billion or $5.95 per share, versus $331.4 million or $0.65 per share in the prior-year period, aided by a gain from sale of its NextRx pharmacy benefit management subsidiaries to Express Scripts Inc. (ESRX). Total revenues increased over 26% to $19.05 billion from $15.07 billion a year earlier.
Yet another competitor, UnitedHealth Group Inc. (UNH) posted an increase in fourth-quarter profit totaling, $944 million or $0.81 per share, compared to $726 million or $0.60 per share in the year-ago period, reflecting strong performance from its health services businesses and public and senior health benefits programs. Total revenues advanced to $21.8 billion from $20.5 billion last year.
Coventry Health shares, which have been trading between $7.97 and $27.27 in the past 52 weeks, closed Monday's trading session at $22.44.
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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.