WellCare Health Plans (WCG) Tops Q1 EPS by 43c, Beats on Revenue; Raises FY17 Adj. EPS Guidance

WellCare Health Plans (NYSE: WCG) reported Q1 EPS of $1.61, $0.43 better than the analyst estimate of $1.18. Revenue for the quarter came in at $3.92 billion versus the consensus estimate of $3.86 billion.

GUIDANCE:

WellCare Health Plans sees FY2017 EPS of $6.55-$6.80, versus the consensus of $6.69.

2017 Financial Outlook

WellCare is increasing its full-year 2017 adjusted EPS guidance to a range of $6.55 to $6.80 from its previous guidance range of $6.00 to $6.25 per diluted share. This revised guidance includes the acquisitions of Universal American and certain assets of PHP.

Key Highlights

• GAAP and adjusted total premium revenue of $3.9 billion for the first quarter of 2017 increased 11.6 percent and 13.5 percent, respectively, compared with the first quarter of 2016.
• GAAP and adjusted Medicaid Health Plans premium revenue of $2.6 billion for the first quarter of 2017 increased 11.8 percent and 14.7 percent, respectively, compared with the first quarter of 2016.
• Medicare Health Plans premium revenue of $1.1 billion for the first quarter of 2017 increased 12.4 percent compared with the first quarter of 2016.
• Medicare Health Plans MBR for the first quarter of 2017 decreased 160 basis points compared with the first quarter of 2016.
• GAAP and adjusted net income margin for the first quarter of 2017 increased 60 basis points and 40 basis points, respectively, compared with the first quarter of 2016.
• On January 1, 2017, the company launched its Nebraska Medicaid business, and as of March 31, 2017, serves approximately 77,000 Medicaid members in Nebraska.
• As previously announced on April 28, 2017, WellCare completed its acquisition of Universal American Corp. (\"Universal American\"). Universal American has approximately 119,000 Medicare Advantage members in Texas, New York and Maine as of March 31, 2017.
• On May 1, 2017, WellCare completed its previously announced acquisition of certain Arizona Medicaid assets of Phoenix Health Plan (\"PHP\"). The transaction included the transfer of approximately 44,000 Medicaid members to Care1st Arizona Health Plan, Inc. (\"Care1st Arizona\"), a wholly owned subsidiary of WellCare.
• On May 1, 2017, the company began services under its successfully retained Missouri Medicaid contract. The new contract expands the MO HealthNet Managed Care (Medicaid) program statewide. As of March 31, 2017, the company served approximately 123,000 Medicaid members in Missouri.
• On March 22, 2017, WellCare issued 5.25% senior notes due 2025 (the \"2025 notes\") in the aggregate principal amount of $1.2 billion. The company used the net proceeds from the offering to repay in full $100 million outstanding under its senior unsecured revolving credit facility and to redeem in full the outstanding principal amount of $900 million of its 5.75% senior notes due 2020 (the "2020 notes") on April 7, 2017. WellCare also increased the amount available under its senior unsecured revolving credit facility from $850 million to $1.0 billion.

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

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