Coventry Health Care – CVH – Reports Second Quarter Earnings

Coventry Health Care, Inc. (NYSE: CVH) reported consolidated operating results for the quarter ended June 30, 2012. Operating revenues totaled $3.5 billion for the quarter, with net earnings of $91.7 million or earnings per diluted share (EPS) of $0.65. These results include a one-time $7.7 million, or $0.03 EPS, impairment charge resulting from the write down of intangible assets due to the non-renewal of the Company’s Kansas Medicaid contract effective January 1, 2013.

“Our second quarter results reflect strong performance in our Government Programs businesses including significant improvement in our Medicaid operations and sequential growth in our Medicare products,” said Allen F. Wise, chairman and chief executive officer of Coventry. “We remain on track for our full year consolidated 2012 EPS guidance and, although there remains a great deal of work to be done, I am encouraged by the financial and operational progress that we have made in our Kentucky Medicaid business.”

CVH – Second Quarter 2012 Consolidated Highlights

• CVH – Total revenues of $3.5 billion, an increase of 16% over the prior year quarter
• Sequential growth of 47,000 members across our Government Programs businesses of Medicare Advantage Coordinated Care Plans (MA-CCP), Medicare Part D, and Medicaid
• Selling, general, and administrative expense (SG&A) of 14.3% of total revenue, a decline of 170 basis points from the prior year quarter
• Approximately $850 million of deployable free cash at the parent at June 30, 2012
  • Received $215 million in dividends from regulated subsidiaries during June
• Repurchased 9.3 million shares for $300 million during the second quarter
  • Largest quarter of share repurchase activity in the Company’s history

CVH – 2012 Full Year Guidance

• Risk revenue of $12.900 billion to $13.065 billion
• Management services revenue of $1.165 billion to $1.200 billion
• Consolidated revenue of $14.065 billion to $14.265 billion
• Consolidated MLR of 84.0% to 84.7%
• Cost of sales expense of $257.0 million to $263.0 million
• SG&A of $2.07 billion to $2.11 billion
• Depreciation and amortization expense of $148.0 million to $152.0 million
• Other income of $97.0 million to $101.0 million
• Interest expense of $99.0 million to $101.0 million
• Tax rate of 37.7% to 38.3%
• Diluted share count of 136.0 million to 138.0 million
• EPS of $3.10 to $3.30

About Coventry Health Care – CVH

Coventry Health Care (CVH) is a diversified national managed health care company based in Bethesda, Maryland, dedicated to delivering high-quality health care solutions at an affordable price. CVH provides a full portfolio of risk and fee-based products including Medicare and Medicaid programs, group and individual health insurance, workers’ compensation solutions, and network rental services. With a presence in every state in the nation, Coventry’s products currently serve approximately 5 million individuals helping them receive the greatest possible value for their health care investment.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.