WellCare Health Plans (WCG) Tops Q2 EPS by 34c, Revenues; Boosts FY18 EPS Guidance

WellCare Health Plans (NYSE: WCG) reported Q2 EPS of $3.37, $0.34 better than the analyst estimate of $3.03. Revenue for the quarter came in at $4.52 billion versus the consensus estimate of $4.66 billion.

"We are pleased with our second quarter 2018 results as they reflect continued strong performance across all three lines of our business," said Ken Burdick, WellCare's chief executive officer. "We are also pleased that we continue to advance our growth agenda through our recent Medicaid wins in Florida and our pending acquisition of Meridian Health Plans."

"As a result of our second quarter performance, we are revising our full-year 2018 adjusted earnings per diluted share guidance to a range of $10.70 to $10.90," Burdick continued.

Key Highlights

• GAAP and adjusted total premium revenue of $4.61 billion and $4.52 billion for the second quarter of 2018 increased 7.4 percent and 6.0 percent, respectively, compared with the second quarter of 2017.
• Medicare Health Plans premium revenue of $1.5 billion for the second quarter of 2018 increased 17.5 percent compared with the second quarter of 2017.
• GAAP and adjusted net income margin for the second quarter of 2018 increased approximately 160 basis points to 3.3 percent and approximately 100 basis points to 3.7 percent, respectively, compared with the second quarter of 2017.
• On May 29, 2018, WellCare announced that it entered into a definitive agreement to acquire Meridian Health Plans of Michigan Inc., Meridian Health Plan of Illinois, Inc., and MeridianRx, a pharmacy benefit manager (PBM) (collectively, \"Meridian\") for $2.5 billion in cash. The transaction is expected to close in the next few months, subject to customary closing conditions, including regulatory approvals.
• On July 5, 2018, WellCare of Florida, Inc., a subsidiary of WellCare and known as Staywell Health Plan, received a Notice of Intent to Award a contract from the Florida Department of Health to provide statewide managed care services to more than 60,000 children with medically complex conditions through the Children\'s Medical Services Managed Care Plan (\"CMS Plan\"). This award is in addition to WellCare\'s previously announced Managed Medical Assistance, Long-Term Care and Serious Mental Illness Specialty Plan Notice of Agency Decision awards from the Florida Agency for Health Care Administration (\"AHCA\") that were announced on April 24, 2018.
• On July 23, 2018, WellCare amended and restated its credit agreement and increased the principal amount available for borrowings to $1.3 billion from $1.0 billion, and extended the maturity date to July 2023 from January 2021.
• As of June 30, 2018, unregulated cash and investments were approximately $514.8 million.

2018 Financial Outlook

WellCare is increasing its full-year adjusted EPS guidance to a range of $10.70 to $10.90 from its previous guidance range of $10.00 to $10.30 per diluted share. Refer to the Appendix included in this news release for specific 2018 guidance metrics, related footnotes and basis of presentation.

GUIDANCE:

WellCare Health Plans sees FY2018 EPS of $10.70-$10.90, versus the consensus of $10.30.

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

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