Coventry Health Care Inc. Earnings Cheat Sheet: Snaps Strong Streak with Profit Drop

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

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Coventry Health Care Earnings Cheat Sheet for the Third Quarter

Results: Net income for the health care plans company fell to $122.7 million (84 cents per share) vs. $189.9 million ($1.29 per share) a year earlier. This is a decline of 35.4% from the year earlier quarter.

Revenue: Rose 4.2% to $2.98 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: CVH beat the mean analyst estimate of 82 cents per share. Analysts were expecting revenue of $3.03 billion.

Quoting Management: “I am pleased with the progress the Company has made and the performance of the businesses, such that we can increase 2011 full year guidance for the third time this year,” said Allen F. Wise, chairman and chief executive officer of Coventry. “More importantly, I am optimistic about the growth opportunities for our Company. Recent examples include the pending Family Health Partners acquisition, the Kentucky Medicaid contract, and our new preferred network Part D product which was approved for 2012.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 21887.8% from the year earlier, while the figure increased 13.3% in the first quarter, 37.8% in the fourth quarter of the last fiscal year and more than twofold in the third quarter of the last fiscal year.

The company has now topped analyst estimates for the last four quarters. It beat the mark by 7 cents in the second quarter, by 13 cents in the first quarter, and by 7 cents in the fourth quarter of the last fiscal year.

Revenue has now gone up for three straight quarters. In the second quarter, revenue rose 5.9% to $3.06 billion while the figure rose 6.6% in the first quarter from the year earlier.

Looking Forward: The outlook for the company’s results in the upcoming quarter is unfavorable. The average estimate for the fourth quarter is 68 cents per share, down from 70 cents ninety days ago. For the fiscal year, the average estimate has moved up from $2.96 a share to $2.99 over the last ninety days.

Competitors to Watch: UnitedHealth Group Inc. (NYSE:UNH), Aetna Inc. (NYSE:AET), Health Net, Inc. (NYSE:HNT), WellCare Health Plans, Inc. (NYSE:WCG), Universal American Corp. (NYSE:UAM), WellPoint, Inc. (NYSE:WLP), CIGNA Corporation (NYSE:CI), Humana Inc. (NYSE:HUM), Centene Corporation (NYSE:CNC), and Magellan Health Services, Inc. (NASDAQ:MGLN).

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(Source: Xignite Financials)