TAMPA, Fla. (AP) — WellCare Health Plans Inc. said Friday its first-quarter earnings more than tripled as the government health insurance provider saw a big membership gain in Medicare prescription drug plans compared to last year, when enrollment fell mainly due to marketing sanctions from the federal government.
The Tampa, Fla., company earned $21.3 million, or 50 cents per share, in the three months that ended March 31. That compares with earnings of $6.4 million, or 15 cents per share, in the same quarter of 2010. Adjusted net income for 2011′s first quarter was 66 cents per share.
Revenue climbed 9 percent to $1.47 billion.
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The performance trounced Wall Street expectations. Analysts surveyed by FactSet expected, on average, earnings of 13 cents per share on $1.45 billion in revenue.
Company shares soared 9.4 percent, or $4, to $46.44 in midday trading.
WellCare also raised its 2011 earnings forecast. It now expects adjusted net income to range between $3.35 and $3.65 per share, up from its previous expectation of about $2.45 to $2.70 per share.
Analysts expect earnings of $2.80 per share.
The company also said Friday a U.S. District Court approved a previously disclosed settlement resolving claims in a securities class action lawsuit. WellCare took a charge for the settlement in last year's second quarter.
Several managed care companies have already reported better-than-expected first quarter numbers and raised their earnings forecasts for the year. The sector has been helped, in part, by health care use that has been climbing slower than insurers expect.
Goldman Sachs analyst Matthew Borsch said in a research note WellCare's results "were exceptionally strong even by the now-high standards from the sector tailwind this quarter."
WellCare said stand-alone Medicare Part D prescription drug plan membership grew 27 percent compared to last year's quarter, and premium revenue from that segment rose 36 percent.
Membership fell slightly in Medicaid plans, the state-federal program that provides health coverage for the needy, aged, blind and disabled. But enrollment grew slightly in Medicare Advantage plans, which are privately run versions of the government's Medicare program.
The company also said its total expenses rose 7 percent to $1.44 billion in the quarter.
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