WellCare Health Plans (NYSE: WCG) reported Q3 EPS of $4.08, $2.17 better than the analyst estimate of $1.91. Revenue for the quarter came in at $4.39 billion versus the consensus estimate of $4.36 billion.

2017 Financial Outlook

WellCare is increasing its full-year 2017 adjusted EPS guidance to a range of $8.25 to $8.40 from its previous guidance range of $6.75 to $6.95 per diluted share. The revised guidance includes the previously mentioned recognized tax benefit of approximately $0.53 per diluted share and $0.40 per diluted share related to the Florida Medicaid retroactive premium revenue, partially offset by an estimated $0.56 to $0.65 per diluted share as a result of the effect of a premium deficiency reserve (PDR) the company expects to record in the fourth quarter of 2017 in connection with its new contract with Illinois HFS that is expected to be effective January 1, 2018.

GUIDANCE:

WellCare Health Plans sees FY2017 EPS of $8.25-$8.40, versus the consensus of $7.01.

Third Quarter 2017 Highlights

• GAAP and adjusted total premium revenue for the third quarter of 2017 increased 22.7 percent and 25.2 percent, respectively, compared with the third quarter of 2016.
• Medicaid Health Plans GAAP and adjusted premium revenue for the third quarter of 2017 increased 11.4 percent and 14.7 percent, respectively, compared with the third quarter of 2016.
• Medicare Health Plans premium revenue for the third quarter of 2017 increased 52.9 percent compared with the third quarter of 2016.
• Medicare Prescription Drug Plans (PDP) premium revenue increased 14.8 percent in the third quarter of 2017 compared with the third quarter of 2016.
• Medicaid Health Plans GAAP and adjusted MBR improved 140 basis points and 400 basis points, respectively, in the third quarter of 2017 compared with the third quarter of 2016.
• On July 1, 2017, the company began services in Georgia under its successfully retained Medicaid contract with the Georgia Department of Community Health. As of September 30, 2017, the company served approximately 498,000 Medicaid members in Georgia.
• As previously announced on October 19, 2017, the company signed a contract with the Illinois Department of Health Care and Family Services (HFS) to administer the Health Choice Illinois Medicaid managed care program statewide. Services under the new contract are expected to begin on January 1, 2018. The contract is for four years and may be renewed up to four additional years at the discretion of HFS.
• WellCare\'s Medicare Advantage (MA) contracts serving certain of the company\'s members in Florida, Maine, New York and Texas received a 4.0 on CMS\'s 5-Star Rating System for the 2018 Plan Year, serving 38.9 percent of WellCare\'s MA members as of September 30, 2017.

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