DOW JONES NEWSWIRES
Coventry Health Care Inc.'s (CVH) third-quarter earnings fell 17% on a $26.7 charge million related to the sale of its Medicaid administration business.
Profit excluding the charge beat Wall Street estimates and the managed-care company raised its 2009 earnings forecast to $2.01 to $2.03 a share from July's boosted forecast of $1.85 to $1.95.
Like other managed-care companies, Coventry has been hurt by higher medical costs and declining enrollment and faces lower government reimbursements for its Medicare and Medicaid segments.
Coventry reported a profit of $70.6 million, or 48 cents a share, down from $85.5 million, or 58 cents, a year earlier. The latest period included 18 cents in charges related to its sale of First Health Services while the phrior year had 15 cents in investment write-downs and losses.
Revenue increased 17% to $3.44 billion as premium revenue grew 20%.
Analysts polled by Thomson Reuters most recently forecast earnings, excluding items, of 54 cents on revenue of $3.48 billion.
Total membership rose 13% as of to 5.2 million as of Sept. 30 from a year earlier and added 29,000 people in the quarter amid continued growth in its Medicare products.
Medical benefits ratio, or the amount of premiums used to pay patient medical costs, rose to 84.4% from 83.8% a year earlier but was down from 86.4% a quarter earlier.
Shares closed Thursday at $20.91 and didn't trade premarket. The stock is up roughly 40% this year.
-By Tess Stynes, Dow Jones Newswires; 212-416-2481;
Tess.Stynes@dowjones.com;