Triple-S Management (GTS) Tops Q4 EPS by 2c, Revenues Miss; Offers FY20 EPS/Revenue Mid-Point Guidance Below Consensus

Triple-S Management (NYSE: GTS) reported Q4 EPS of $0.25, $0.02 better than the analyst estimate of $0.23. Revenue for the quarter came in at $831.2 million versus the consensus estimate of $841.84 million.

Quarterly Consolidated and Other Highlights

• Net income of $13.2 million, or $0.55 per diluted share, versus net loss of $10.9 million, or $0.48 per share, in the prior-year period;
• Adjusted net income of $6.0 million, or $0.25 per diluted share, versus adjusted net income of $10.1 million, or $0.44 per diluted share, in the prior-year period;
• Operating revenues of $831.2 million, a 14.9% increase from the prior-year period, primarily reflecting higher Managed Care net premiums earned;
• Consolidated loss ratio of 81.0%, a 10 basis point increase versus the fourth quarter of 2018;
• Medical loss ratio (\"MLR\") improved 10 basis points to 83.7%;
• Consolidated operating income was $8.7 million, compared to consolidated operating income of $9.8 million in the prior-year period;
• Under the Company\'s share repurchase program, during the fourth quarter of 2019, the Company repurchased 527,881 shares at an aggregate cost of approximately $10.0 million. As of February 26, 2020, $10.0 million remains available under the program.

"Our fourth quarter results concluded a strong 2019, exceeding our expectations with excellent growth in premiums earned at our core Managed Care segment," said Roberto Garcia-Rodriguez, President and Chief Executive Officer. "We also had a solid open enrollment season in Medicare Advantage−aided by an attractive product offering, a smart brand strategy, and focused retention efforts−and continue to see gains in our fully insured Commercial membership."

"Looking ahead into 2020, we aim to further strengthen our core Managed Care products and membership rolls, particularly in Medicare Advantage and Commercial," added Mr. Garcia Rodriguez. "We will also undertake additional initiatives to help ensure our customers continue to receive superior service, while keeping a watchful eye on medical cost trends and operating expenses. Overall, we remain focused on generating long-term growth by creating a unique value proposition and healthcare experience for our members in partnership with our provider community."

GUIDANCE:

Triple-S Management sees FY2020 EPS of $2.60-$2.80, versus the consensus of $2.80. Triple-S Management sees FY2020 revenue of $3.62-3.66 billion, versus the consensus of $3.65 billion.

The Company is initiating the following full year 2020 guidance:

• Consolidated operating revenue is expected to be between $3.62 billion and $3.66 billion, which includes Managed Care premiums earned, net between $3.25 billion and $3.29 billion;
• Consolidated claims incurred ratio is expected to be between 81.0% and 83.0%, while the Managed Care MLR is expected to be between 83.5% and 85.5%;
• Consolidated operating expense ratio is expected to be between 17.5% and 18.5%;
• The effective tax rate is expected to be between 28.0% and 30.0%; and
• Adjusted net income per diluted share is expected to be between $2.60 and $2.80. This expectation is inclusive of the impact of approximately $0.24 per diluted share of estimated losses incurred at the Company\'s Property and Casualty segment after the recent earthquake activity experienced in Puerto Rico during January 2020. Adjusted net income per diluted share does not account for any potential share repurchase activity during 2020. The Company is assuming a weighted average diluted share count for full year 2020 of 23.1 million shares.

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

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