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WellCare Health Plans Q4 Results Top Estimates; Lifts FY Profit View

WellCare Health Plans Inc. (WCG) reported that its GAAP net income for the fourth quarter of 2018 was $55.9 million or $1.11 per share, compared with GAAP net income of $60.7 million, or $1.34 per share, for the fourth quarter of 2017. The year-over-year decrease in GAAP net income was primarily due to the effect of the Tax Cut and Jobs Act of 2017 and the associated one-time, noncash benefit in 2017 from the revaluation of the company's net deferred tax liability, offset by organic growth, continued operational execution and the effect of the TCJA that resulted in a lower statutory tax rate for 2018.

Adjusted net income for the fourth quarter of 2018 was $82.4 million, or $1.63 per diluted share, compared with adjusted net income of $14.2 million, or $0.32 per diluted share, for the fourth quarter of 2017. The year-over-year increase in adjusted net income was primarily due to organic growth, continued operational execution and the effect of the TCJA that resulted in a lower statutory tax rate for 2018. Analysts polled by Thomson Reuters expected the company to report earnings of $1.56 per share. Analysts' estimates typically exclude special items.

GAAP and adjusted total revenue of $6.1 billion and $5.9 billion for the fourth quarter of 2018 increased 39.7 percent and 37.5 percent, respectively, compared with the fourth quarter of 2017.Analysts expected revenue of $5.83 billion for the quarter. The year-over-year increases in GAAP and adjusted total revenue were primarily the result of the company's acquisition of Meridian, organic growth, and, for the GAAP revenue increase, the reinstatement of the Affordable Care Act Health Insurer Fee and the associated Medicaid ACA HIF reimbursement for 2018.

WellCare increased its full-year 2019 adjusted earnings per share guidance to a range of $13.25 to $13.50 from its previous guidance range of $13.15 to $13.40 per share. Analysts expect annual earnings of $13.47 per share.

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