Triple-S Management (GTS) Tops Q1 EPS by 51c, Revenues Beat; Raises FY19 EPS/Revenue Guidance

Triple-S Management (NYSE: GTS) reported Q1 EPS of $0.77, $0.51 better than the analyst estimate of $0.26. Revenue for the quarter came in at $787.6 million versus the consensus estimate of $767.49 million.

• Net income of $34.8 million, or $1.52 per diluted share, versus net income of $3.9 million, or $0.17 per diluted share, in the prior-year period;
• Adjusted net income of $17.7 million, or $0.77 per diluted share, versus adjusted net income of $14.1 million, or $0.60 per diluted share;
• Operating revenues of $787.6 million, a 2.3% increase from the prior-year period, primarily reflecting higher Managed Care premiums;
• Consolidated loss ratio improved 120 basis points to 81.1%;
• Medical loss ratio ("MLR") improved 140 basis points to 83.6%;
• Consolidated operating income was $31.7 million, compared to consolidated operating income of $18.1 million in the prior-year period.

"We opened 2019 with a solid first quarter, driven by sustained improvement in our core Managed Care segment," said Roberto Garcia-Rodriguez, President and Chief Executive Officer. "The strength of our brand, the breadth of our provider network and our competitive product offering led to double-digit sequential growth in both Medicare Advantage and Medicaid membership, while our clinical and network management initiatives continue to drive down the overall medical loss ratio. Our Life and P&C segments are also performing quite well, and we remain adequately reserved against our P&C hurricane-related losses."

"These results reaffirm the soundness of our strategy and reflect disciplined execution by our associates," added Mr. Garcia-Rodriguez. "Looking ahead, we will continue investing in our platforms to reduce the overall cost of care, enhance both member and provider engagement, expand our market share and build out an integrated delivery model.

GUIDANCE:

Triple-S Management sees FY2019 EPS of $1.90-$2.10, versus the consensus of $1.95. Triple-S Management sees FY2019 revenue of $3.11-3.15 billion, versus the consensus of $3.08 billion.

The Company is raising its full year 2019 guidance for consolidated operating revenue, Managed Care premiums earned, and adjusted net income per diluted share. It is maintaining its full year 2019 guidance for its consolidated claims incurred ratio, Managed Care MLR and consolidated operating expense ratio, and adjusting its effective tax rate guidance. More specifically:

• The Company raised consolidated operating revenue expectations for 2019 to be between $3.11 billion and $3.15 billion, which includes Managed Care premiums earned, net between $2.78 billion and $2.82 billion. The Company\'s previous outlook was for consolidated operating revenue between $3.04 billion and $3.08 billion, which included Managed Care premiums earned, net between $2.71 billion and $2.75 billion;
• The Company continues to expect the consolidated claims incurred ratio for 2019 to be between 81.3% and 83.3%, and Managed Care MLR to be between 84.0% and 86.0%;
• The Company continues to expect its consolidated operating expense ratio for 2019 to be between 17.6% and 18.6%;
• The Company is adjusting expectations for its effective tax rate to be between 29.0% and 34.0% due to an expected increase in Managed Care operating income, which has a higher tax rate relative to the other segments. The Company\'s previous outlook was for effective tax rate to be between 25.0% and 30.0%; and
• The Company raised adjusted net income per diluted share expectations for 2019 to be between $1.90 and $2.10, compared to its previous outlook for adjusted net income per diluted share between $1.85 and $2.05. Adjusted net income per diluted share guidancedoes not account for any share repurchase activity during 2019.

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

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