Health insurer HealthSpring, Inc. (HS) reported Thursday a slight decrease in first-quarter earnings, yet in line with analysts' estimates, as increases in medical expense outpaced revenue growth. The company also maintained its earlier outlook for fiscal 2009.
For the first quarter, net income declined marginally to $20.6 million or $0.38 per share from $21.1 million or $0.37 per share in the previous year.
On average, 11 analysts polled by Thomson Reuters expected the company to report earnings of $0.38 per share in the first quarter. Analysts' estimates typically exclude special items.
Total revenue for the quarter surged to $646.1 million from $552.7 million a year ago. Premium revenue increased 17.3% to $634.6 million from $540.9 million in the same period last year. Seven analysts expected the company to record revenue of $638.27 million.
Medicare Advantage premium revenue grew 17.9% to $541.4 million, while stand-alone PDP premium revenue increased 16.7% to $92.5 million. Medicare Advantage membership grew 14.8% to 175,138 from 152,527, while PDP membership rose 11.2% to 286,810 from 258,012 in the prior-year period.
Total operating expenses increased year-over-year to $613.7 million from $519.7 million, as medical expense went up to $529.6 million from $444.2 million last year.
Looking forward, for fiscal 2009, the Nashville, Tennessee-based company reiterated its earnings guidance of $2.00 - $2.20 per share and revenues guidance range of between $2.5 billion and $2.6 billion.
Analysts currently expect HealthSpring to post earnings of $2.11 a share on revenue of $2.55 billion for the full year.
HS closed Wednesday's trading session at $9.50 on the NYSE.
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