WellCare Health Plans Q1 Profit More Than Doubles; Lifts 2014 Outlook

(RTTNews) - WellCare Health Plans, Inc. (WCG) said that its GAAP net income for the first quarter of 2014 significantly increased to $44.1 million or $1.00 per share, from $21.5 million, or $0.49 per share, in the first quarter of 2013.

Adjusted net income for the first quarter was $49.7 million, or $1.13 per share, up from $27.5 million, or $0.63 per share last year. Adjusted net income per share for the latest-quarter increased $0.50 compared with the same period in 2013, primarily due to the recognition of the Windsor bargain purchase gain, premium revenue growth in all three of the Company's segments, the increase in the Medicaid segment gross margin rate, and the reduction in the administrative expense ratio. These factors were offset in part by the decreases in the gross margin rates of the Medicare Health Plans and Medicare Prescription Drug Plans or PDPs segments, and increased interest expense.

Analysts polled by Thomson Reuters expected the company to report earnings of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.

"Our operating results this quarter were primarily due to the strong growth and performance of our Medicaid health plans, offset in part by weaker than anticipated results from our Medicare health and drug plans," said Dave Gallitano, chairman of the board and CEO.

Total revenues for the quarter grew to $2.986 billion from last year's $2.257 billion. Wall Street expected revenues of $2.80 billion.

Adjusted net income per share for the year ending December 31, 2014 is expected to be between approximately $4.40 and $4.75. The previous guidance was for adjusted net income per diluted share of between $3.75 and $4.05. The increased guidance results mainly from incorporation into the guidance of the Company's better than anticipated first quarter results, as well as an improved outlook for the Medicaid Health Plans segment, offset in part by unfavorable expectations relative to initial guidance for the Medicare Health Plans and Medicare PDPs segments.

Premium revenue for the year ending December 31, 2014 is expected to be between $12.0 and $12.1 billion. The Company previously anticipated premium revenue to be between $11.6 and $11.75 billion.

Street currently is looking for fiscal year 2014 earnings of $3.97 per share on annual revenues of $11.80 billion.