Coventry Health's profit rose 74% in first quarter

April 30, 2003|BY A SUN STAFF WRITER

Coventry Health Care yesterday posted first-quarter earnings 74 percent higher than in the quarter a year ago, and raised its earnings guidance for the year.

The Bethesda company, which operates HMOs in about a dozen markets, reported net earnings of $49.5 million, or 83 cents a diluted share for the quarter that ended March 31- handily beating a consensus of analysts' estimates of 70 cents. That compares with $28.4 million, or 45 cents a share, in the year-earlier quarter.

For the year, the company said it expected earnings of $3.40 to $3.50 per share. In earlier guidance, the company had predicted earnings of $2.75 to $2.90.

The improvement came from growth - both internal and from an acquisition - and from premium increases that exceeded health cost inflation.

Membership was 2.1 million at the end of the quarter, up 18 percent in a year. Revenue was $1.1 billion, up 25.6 percent from $848.5 million in the first quarter of 2002. Revenue per member per month for commercial business increased 12.7 percent - reflecting the size of premium increases - while medical costs per member per month grew only 8.5 percent.

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