WellCare Health Plans (WCG) Tops Q3 EPS by $1.68, Revenues Beat

WellCare Health Plans (NYSE: WCG) reported Q3 EPS of $5.50, $1.68 better than the analyst estimate of $3.82. Revenue for the quarter came in at $7.14 billion versus the consensus estimate of $6.79 billion.

Key Highlights

• GAAP and adjusted net income margin of 3.4 percent and 3.9 percent, respectively, for the third quarter of 2019 increased approximately 80 basis points and 60 basis points, respectively, compared with the third quarter of 2018.
• GAAP and adjusted total revenue of $7.1 billion and $7.1 billion, respectively, for the third quarter of 2019 increased 41.2 percent and 43.4 percent, respectively, compared with the third quarter of 2018.
• GAAP and adjusted Medicaid Health Plans revenue of $4.9 billion and $4.8 billion, respectively, for the third quarter of 2019 increased 51.3 percent and 55.2 percent, respectively, compared with the third quarter of 2018.
• Medicare Health Plans revenue of $1.8 billion for the third quarter of 2019 increased 16.4 percent compared with the third quarter of 2018.
• Medicare PDP revenue of $241.2 million for the third quarter of 2019 increased 32.3 percent compared with the third quarter of 2018.
• Medicare PDP membership was approximately 1.7 million as of September 30, 2019, and increased by approximately 641,000 members, or 60.7 percent, compared with September 30, 2018.
• GAAP and adjusted SG&A ratios for the third quarter of 2019 decreased approximately 70 basis points and 90 basis points, respectively, compared with the third quarter of 2018.
• In the third quarter of 2019, WellCare incurred $9.2 million pre-tax, or ($0.14) per adjusted diluted share, in startup costs associated with the North Carolina statewide Medicaid contract implementation. These startup costs are included in adjusted EPS.
• WellCare's 2020 PDP bids are below the benchmark in 32 of 34 CMS regions, and within the de minimis range in two other regions when combining the results of WellCare's two basic plans.

"We are pleased with our strong revenue and earnings growth this quarter," said Ken Burdick, WellCare's chief executive officer. \"All three business segments continue to contribute to our strong financial performance, driven by a combination of organic and acquired growth, as well as continued focus on financial and operational execution by our WellCare associates."

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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