WellCare Health Plans (WCG) Tops Q1 EPS by 65c, Revenues Beat; No Guidance Due to Pending Merger

WellCare Health Plans (NYSE: WCG) reported Q1 EPS of $3.69, $0.65 better than the analyst estimate of $3.04. Revenue for the quarter came in at $6.73 billion versus the consensus estimate of $6.57 billion.

Key Highlights

• GAAP and adjusted total revenue of $6.8 billion and $6.7 billion for the first quarter of 2019 increased 45.5 percent and 47.9 percent respectively, compared with the first quarter of 2018.
• GAAP and adjusted Medicaid Health Plans revenue of $4.5 billion and $4.4 billion for the first quarter of 2019 increased 59.2 and 63.7 percent, respectively, compared with the first quarter of 2018.
• Medicare Health Plans revenue of $1.8 billion for the first quarter of 2019 increased 18.4 percent compared with the first quarter of 2018.
• Medicare PDP membership was approximately 1.6 million as of March 31, 2019, and increased by approximately 557,000 members, or 51.9 percent, compared with March 31, 2018.
• GAAP and adjusted SG&A ratios for the first quarter of 2019 decreased approximately 20 basis points and 50 basis points, respectively, compared with the first quarter of 2018.
• GAAP net income margin of 2.2 percent was consistent with the first quarter of 2018 and adjusted net income margin of 2.8 percent increased by 30 basis points compared with the first quarter of 2018.
• On March 26, 2019, WellCare entered into an Agreement and Plan of Merger ("Merger Agreement") with Centene in which Centene has agreed to acquire all of the issued and outstanding shares of WellCare common stock for $120 cash and 3.38 shares of Centene common stock per share of WellCare common stock, subject to regulatory approval and other customary closing conditions. The transaction is expected to close in the first half of 2020.

"We're pleased with our strong revenue and earnings growth in the quarter," said Ken Burdick, WellCare's chief executive officer. "While we pursue the approvals for our recently announced combination with Centene, we continue to focus on serving our 6.3 million members on behalf of our government partners."

2019 Financial Outlook

Due to the pending merger with Centene, WellCare is not currently providing updated financial guidance.

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

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