WellCare Health Q3 Adj. Earnings Top View, Appoints Gallitano As Interim CEO

(RTTNews) - WellCare Health Plans, Inc. (WCG) Friday reported a higher third-quarter profit, as premium revenue grew 38 percent, benefited by increase in membership. Adjusted earnings as well as revenues topped analysts' estimates. The company lowered the upper end of its earnings per share outlook for full year 2013, but lifted its annual premium revenue view. The shares are down about 6 percent in the morning trade.

WellCare Health also announced that its board of directors has appointed the company's Chairman David Gallitano as interim CEO, replacing Alec Cunningham. Gallitano became chairman of WellCare's board on May 22, 2013, and has been a WellCare director since 2009.

The company said it is conducting a national search for a new CEO. Gallitano will fill both the chairman and CEO roles until a successor is appointed.

The provider of managed care services for government-sponsored health care programs, said its net income for the third quarter increased to $63.99 million or $1.45 per share from $38.29 million or $0.87 per share in the previous year.

On an adjusted basis, earnings were $1.56 per share, while the company posted $1.05 per share a year ago.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $1.52 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter climbed to $2.50 billion from $1.82 billion in the same quarter last year. Ten analysts were looking for revenue of $2.37 billion for the quarter.

Premium revenue grew 38 percent year over year to $2.48 billion, driven by a 71 percent increase in Medicare Advantage segment premium revenue and a 37 percent rise in Medicaid segment premium revenue.

Total Membership increased to 2.82 million from 2.56 million a year earlier. In Medicare Advantage segment, membership as of September 30, 2013, increased 69 percent to 283,000 members, while Medicaid segment membership grew 16 percent to 1.76 million members.

Meanwhile, medical benefits expenses were $2.1 billion, an increase of 38 percent from the year-ago quarter.

For full-year 2013, the company now expects adjusted net income per share to be in the range of about $4.70 to $4.80, while the firm earlier projected $4.70 to $4.90 per share.

Annual Premium revenue in total is expected to be between $9.35 billion and $9.40 billion, up from the previous guidance of $9.15 billion to $9.25 billion.

Street currently is looking for full-year 2013 earnings of $4.91 per share on annual revenues of $9.35 billion. WCG is currently trading at $62.73, down 5.92 percent.