Coventry Health Care Earnings: Revenue UP, Profits SINK

S&P 500 (NYSE:SPY) component Coventry Health Care Inc. (NYSE:CVH) reported its results for the second quarter. Coventry Health Care operates health plans, insurance companies, network rental, and workers’ compensation services companies.

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Coventry Health Care Inc. Earnings Cheat Sheet

Results: Net income for Coventry Health Care Inc. fell to $91.7 million (65 cents per share) vs. $224.5 million ($1.51 per share) a year earlier. This is a decline of 59.1% from the year-earlier quarter.

Revenue: Rose 16% to $3.52 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Coventry Health Care Inc. reported adjusted net income of 68 cents per share. By that measure, the company beat the mean estimate of 64 cents per share. Analysts were expecting revenue of $3.5 billion.

Quoting Management: “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.”

Key Stats:

After two quarters of falling short, the company beat estimates last quarter. In the first quarter, it missed the mark by one cent, and in the fourth quarter of the last fiscal year, it came in under estimates by 6 cents.

Net income has increased 4361% year-over-year on average across the last five quarters. The biggest gain came in the second quarter of the last fiscal year, when income climbed 21887.8% from the year-earlier quarter.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the third quarter has moved down from 91 cents a share to 73 cents over the last ninety days. The average estimate for the fiscal year is $2.75 per share, down from $3.25 ninety days ago.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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