Triple-S Management (GTS) Reports Q2 EPS of 39c

Triple-S Management (NYSE: GTS) reported Q2 EPS of $0.39, $0.57 better than the analyst estimate of ($0.18). Revenue for the quarter came in at $741.3 million versus the consensus estimate of $720.71 million.

2017 Outlook

García-Rodríguez commented, "In our last earnings release, we provided directional guidance for our Commercial and Medicare businesses, given the proposed changes in the Government Health Plan (GHP) and the broader economic impact of the fiscal control measures required under PROMESA. Although the fiscal control measures have not been entirely implemented, our 90-day extension of the GHP contract gives us more visibility into the outlook of that business, so now we are also providing directional guidance for the GHP.

"In the Commercial business, we expect full-year at-risk member month enrollment to be approximately 4.0 million, plus or minus 5%, reflecting some attrition as well as the addition of new groups. Our MLR now should be in the 83% to 85% range.

"In the Medicare Advantage business, we anticipate full year member month enrollment of about 1.5 million, plus or minus 5%. The expected MLR should be between 90% and 92%.

"Assuming the GHP contract is renewed through the remainder of the year, we expect a member month enrollment of 2.3 million, plus or minus 5%, and an average MLR of 91% for the second half of the year in that business.

"Our ancillary segments are expected to continue showing stable results. In 2017 Life insurance and Property and Casualty premiums are expected to reach $162 million and $90 million, respectively, plus or minus 5%.

"Investment income should be at the same level as in 2016 and administrative expenses now should be in a range of $460 million to $475 million.

"We will continue offering directional information—such as estimates, targets or trends―as appropriate to help guide market expectations. As time progresses and the environment stabilizes, we will consider when and if it makes sense to provide consolidated earnings estimates on a regular basis."

Internal Control Over Financial Reporting

Following our filings for the periods ending December 31, 2016 and March 31, 2017, and as the result of an inspection from the Public Company Accounting Oversight Board (PCAOB), our independent registered public accounting firm requested that we re-evaluate certain internal controls related to the review process of the Managed Care claims paid data input in our incurred but not reported (IBNR) actuarial models. Based on this re-evaluation, the Company determined that controls were not appropriately designed to validate that the claims paid information in the lag triangles used in the IBNR models was reviewed with enough precision to ascertain data is accurately presented by incurred date, causing a material weakness in its internal control over financial reporting. The identification of this issue does not change our consolidated financial statements for those periods. Management has concluded, however, that disclosure controls and procedures and internal control over financial reporting were not effective as of those dates. We have taken steps to address the situation and will amend our Annual Report on Form 10-K as of December 31, 2016 and our Quarterly Report on Form 10-Q as of March 31, 2017 accordingly.

For earnings history and earnings-related data on Triple-S Management (GTS) click here.

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