We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
WellCare Health's (WCG) Q3 Earnings Beat Estimates, Up Y/Y
Read MoreHide Full Article
WellCare Health Plans, Inc. reported third-quarter 2017 adjusted operating earnings of $4.08 per share that outpaced the Zacks Consensus Estimate of $1.90. Earnings per share also increased significantly from $1.63 in the previous-year quarter. The year-over-year improvement was primarily backed by strong results across its all three business lines.
Operational Update
Adjusted total premium revenues of $4.4 billion for the third quarter increased 25.2% year over year due to premium revenue and membership growth across its three segments driven by organic growth and acquisitions. Revenues, however, missed the Zacks Consensus Estimate by 0.2%.
Adjusted selling, general & administrative (SG&A) expenses were $364.8 million, up 35.7% year over year. The adjusted SG&A expense ratio was 8.4%, up 70 basis points (bps) from the year-ago quarter. The deterioration stemmed primarily from the company's acquisitions of Universal American and Care1st Arizona as well as staffing and infrastructure costs.
Quarterly Segment Update
Medicaid Health Plans:
The segment’s membership increased 12% to 2.7 million from the last-year quarter. The rise was driven by the addition of the company's new Medicaid businesses in Arizona and Nebraska and new members from the statewide expansion of the Missouri Medicaid program.
Adjusted Medicaid Health Plans premium revenues were $2.7 billion, up 14.7% year over year, primarily due to membership growth.
Adjusted Medicaid Health Plans’ Medical Benefit Ratio (MBR) was 86.9%, down 400 bps from the last-year quarter. The improvement came on the back of continued operational execution and the effect of Florida Medicaid retroactive premium revenues recognized in the reported quarter.
Medicare Health Plans Segment Results:
Medicare Health Plans membership was 0.492 million, up 45.6% year over year due to the company's acquisition of Universal American, 2017 bid positioning and continued execution on sales and retention initiatives.
Medicare Health Plans premium revenues increased 52.9% on a year-over-year basis to $1.5 billion. This was primarily due to the company's acquisition of Universal American and year-over-year organic membership growth.
The segment’s MBR was 85.7%, up 210 bps due to the buyout of Universal American, the company's 2017 bid strategy and increased investments in quality initiatives.
Medicare Prescription Drug Plans (PDP) Segment Results
Medicare PDP membership was 1.1 million, increasing 12.7% year over year primarily as a result of the company's 2017 bid positioning. The segment’s MBR was 70.7%, up 1190 bps from the last-year quarter due to the same reason.
Medicare PDP premium revenues were $201.9 million, up 14.8% year over year due to membership growth.
WellCare Health Plans, Inc. Price, Consensus and EPS Surprise
Among the other firms in the medical sector that have reported third-quarter earnings so far, the bottom line at Centene Corp. (CNC - Free Report) , Aetna Inc and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
WellCare Health's (WCG) Q3 Earnings Beat Estimates, Up Y/Y
WellCare Health Plans, Inc. reported third-quarter 2017 adjusted operating earnings of $4.08 per share that outpaced the Zacks Consensus Estimate of $1.90. Earnings per share also increased significantly from $1.63 in the previous-year quarter. The year-over-year improvement was primarily backed by strong results across its all three business lines.
Operational Update
Adjusted total premium revenues of $4.4 billion for the third quarter increased 25.2% year over year due to premium revenue and membership growth across its three segments driven by organic growth and acquisitions. Revenues, however, missed the Zacks Consensus Estimate by 0.2%.
Adjusted selling, general & administrative (SG&A) expenses were $364.8 million, up 35.7% year over year. The adjusted SG&A expense ratio was 8.4%, up 70 basis points (bps) from the year-ago quarter. The deterioration stemmed primarily from the company's acquisitions of Universal American and Care1st Arizona as well as staffing and infrastructure costs.
Quarterly Segment Update
Medicaid Health Plans:
The segment’s membership increased 12% to 2.7 million from the last-year quarter. The rise was driven by the addition of the company's new Medicaid businesses in Arizona and Nebraska and new members from the statewide expansion of the Missouri Medicaid program.
Adjusted Medicaid Health Plans premium revenues were $2.7 billion, up 14.7% year over year, primarily due to membership growth.
Adjusted Medicaid Health Plans’ Medical Benefit Ratio (MBR) was 86.9%, down 400 bps from the last-year quarter. The improvement came on the back of continued operational execution and the effect of Florida Medicaid retroactive premium revenues recognized in the reported quarter.
Medicare Health Plans Segment Results:
Medicare Health Plans membership was 0.492 million, up 45.6% year over year due to the company's acquisition of Universal American, 2017 bid positioning and continued execution on sales and retention initiatives.
Medicare Health Plans premium revenues increased 52.9% on a year-over-year basis to $1.5 billion. This was primarily due to the company's acquisition of Universal American and year-over-year organic membership growth.
The segment’s MBR was 85.7%, up 210 bps due to the buyout of Universal American, the company's 2017 bid strategy and increased investments in quality initiatives.
Medicare Prescription Drug Plans (PDP) Segment Results
Medicare PDP membership was 1.1 million, increasing 12.7% year over year primarily as a result of the company's 2017 bid positioning. The segment’s MBR was 70.7%, up 1190 bps from the last-year quarter due to the same reason.
Medicare PDP premium revenues were $201.9 million, up 14.8% year over year due to membership growth.
WellCare Health Plans, Inc. Price, Consensus and EPS Surprise
WellCare Health Plans, Inc. Price, Consensus and EPS Surprise | WellCare Health Plans, Inc. Quote
Financial Update
Net cash provided by operating activities was $910.6 million, down 17.2% year over year.
As of Sep 30, 2017, unregulated cash and investments were $582.2 million, down 34% year over year.
As of Sep 30, 2017, long-term debt of $1.2 billion increased 18.4% from year-end 2016.
Guidance for 2017 Raised
The company expects adjusted earnings per diluted share in the range of $8.25 to $8.40, up from previous guidance of $6.75-$6.95.
Total adjusted premium revenues are expected in the band of $16.675-$16.925 billion, up from its previously guided range of $16.45-$16.85 billion.
Investment & other income is anticipated to be $56 million to $62 million, raised from the previous guidance of $40-$45 million.
Adjusted SG&A ratio is expected to be between 8.3% and 8.4%, up from the previous guided range of 8.0% to 8.25%.
Zacks Rank and Performance of Other Insurers
WellCare presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among the other firms in the medical sector that have reported third-quarter earnings so far, the bottom line at Centene Corp. (CNC - Free Report) , Aetna Inc and UnitedHealth Group Inc. (UNH - Free Report) beat their respective Zacks Consensus Estimate.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>