Coventry Health Care's 3rd-quarter profit falls 17 percent on charge for First Health unit

Associated Press
October 30, 2009

BETHESDA, MD. --- Health insurer Coventry Health Care Inc. said Friday its profit fell 17 percent in the third quarter due to a charge related to the sale of its First Health Services unit.

Coventry earned $70.6 million, or 48 cents per share, down from $85.5 million, or 58 cents per share last year. Revenue rose 18 percent, to $3.44 billion from $2.93 billion.

Excluding charges for the sale of the fee-based Medicaid service business, First Health Services Corp., the company said it earned 66 cents per share.

Analysts polled by Thomson Reuters expected profit of 54 cents per share on revenue of $3.48 billion.

Coventry's premium revenue grew 20 percent to $3.15 billion. Due to lower commercial risk and commercial management membership, total enrollment in Coventry plans rose a half-percent to just over 5.2 million members, mainly on gains in the Medicare D prescription drug program.

The company said its medical loss ratio, or the proportion of premium revenue spent on providing medical care, fell to 84.4 percent from 86.4 percent.

Looking ahead, the company expects full-year adjusted profit between $2.01 and $2.03 per share, up from a prior range of $1.85 to $1.95 per share. Analysts expect profit of $1.91 per share.

Shares of Coventry closed at $20.91 Thursday.

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