Tuesday, before the bell, HealthSpring, Inc. (HS), through its subsidiaries, a managed care organization reported a decline in net income for the second quarter ended June 30, mainly due to the increase in medical expense, which offset the increase in revenues. The company also raised its full-year outlook.
Net income of HealthSpring declined 20.7% year-over-year to $31.89 million or $0.58 per share from $40.22 million or $0.72 per share mainly due to the 28% year-over-year increase in medical expense to $558.40 million from $436.16 million offsetting the 20.4% year-over-year increase in total revenue to $682.54 million from $566.87 million.
Eleven Analysts polled by Thomson Reuters expected HealthSpring to report earnings of $0.56 per share for the second quarter. Analysts' estimates typically exclude one-time items.
HealthSpring's medicare advantage membership increased 18.4% year-over-year to 182,231 and Prescription Drug Plan or PDP membership increased 11% year-over-year to 294,753 due to which the premium revenue increased by 21.1% year-over-year to $671.45 million from $554.67 million.
The medical expenses of medicare advantage plan increased in the second quarter, due to higher inpatient procedure costs in Tennessee health plan and increases in physician expenses in the Alabama, Tennessee, and Texas health plans.
For the six months ended June 30, net income declined to $52.50 million or $0.96 per share from $61.28 million or $1.09 per share for the same period last However, total revenue increased to $1.33 billion from $1.12 billion for the same period last year.
HealthSpring increased its full year earnings guidance to $2.10 to $2.25 per share from its previous guidance of $2.00 - $2.20 per share and increased revenue guidance to $2.6 billion to $2.65 billion from its previous guidance $2.5 billion and $2.6 billion.
Eleven Analysts polled by Thomson Reuters expect HealthSpring to report net income of $2.11 per share for the full year.
Monday, HS closed at $13.24, up 4.83% on NYSE.
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