Wellcare Health Plans (WCG) Misses Q4 EPS Views; Guides FY15 EPS Below Expectations

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February 11, 2015 9:12 AM EST

Wellcare Health Plans (NYSE: WCG) reported Q4 EPS of $0.41, $0.25 worse than the analyst estimate of $0.66. Revenue for the quarter came in at $3.42 billion versus the consensus estimate of $3.43 billion.

Financial Outlook
WellCare currently anticipates that for the year ending December 31, 2015, adjusted net income per diluted share will be between approximately $3.15 and $3.40.
**** The Street sees FY15 EPS of $3.59.
Elements of the Company’s 2015 financial outlook are as follows:
·
Premium revenue is expected to be between $13.5 and $13.8 billion.
·
Premium revenues and MBRs for each of the Company’s segments are anticipated as follows:
Segments
Premium Revenue
MBRs
Medicaid
$8.5 to $8.7 billion
89.25% to 90.25%
Medicare Health Plans
$3.95 to $4.05 billion
85.00% to 86.50%
Medicare PDP
$1.0 to $1.1 billion
85.50% to 87.00%
·
The adjusted administrative expense ratio is expected to be between 8.0% and 8.2%.
The ACA fee expense is expected to be between $230 and $235 million. This amount does not reflect the anticipated reimbursement by state Medicaid government customers.
o
Similar to 2014, WellCare expects 100% of its Medicaid states to reimburse for the Medicaid portion of the ACA fee, grossed up for taxes; this is expected to be between $215 million and $219 million
·
Depreciation and amortization expense is expected to be between $70 and $72 million
·
Interest expense is anticipated to be between $47 and $49 million
·
The effective income tax rate is expected to be between 60.25% and 62.25%
·
Capital expenditures are expected to be between $110 million and $120 million in 2015
·
Adjusted Earnings will exclude the impact of:
o
Certain SG&A expenses related to previously disclosed government investigations and related litigation and resolution costs; and
o
Any transitory costs incurred in 2015 related to the Company’s decision to change pharmacy benefit managers as of January 1, 2016

For earnings history and earnings-related data on Wellcare Health Plans (WCG) click here.


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