TAMPA, Fla. (AP) — WellCare Health Plans Inc.'s fourth quarter earnings more than tripled, as strong enrollment gains helped the Medicaid and Medicare coverage provider trump net income expectations.
The Tampa, Fla., company's stock soared more than 10 percent, adding $6.54, to $69.50 as the market opened Wednesday after it released the earnings report and also delivered a better-than-expected forecast for 2012.
WellCare earned $85.1 million, or $1.96 per share, in the three months that ended Dec. 31. That compares to $26.1 million, or 61 cents per share, in the final quarter of 2010. Adjusted earnings were $2.15 per share.
Total revenue climbed 18 percent to $1.6 billion, as premiums rose by the same percentage to $1.58 billion.
Analysts surveyed by FactSet expected, on average, earnings of $1.19 per share on $1.6 billion in revenue.
WellCare provides managed care for the government-sponsored health plans Medicare, which covers the elderly and disabled, and Medicaid, which focuses on the needy and also disabled people.
Enrollment in the company's Medicare prescription drug coverage grew 27 percent to 976,000. Total membership not counting that population rose 9 percent to about 1.6 million people.
WellCare said results were helped by greater-than-expected membership in its Kentucky Medicaid program after its November launch.
Medicare Advantage membership grew 16 percent to 135,000 people. Medicare Advantage plans are subsidized versions of Medicare run by private insurers.
An unusually low tax rate also added about 20 cents per share to earnings for the insurer, according to a research note from Goldman Sachs analyst Matthew Borsch.
Insurers also have been helped the past several quarters by slower-than-expected growth in health care use. Borsch said that helped WellCare's results, and he expects the trend to continue into next year.
For the full year, WellCare earned $264.2 million, or $6.10 per share, on $6.11 billion in revenue.
For 2012, it expects adjusted earnings to range between $4.40 and $4.60 per share. Analysts expect $4.20 per share.
The insurer was expected to offer 2012 guidance "well below" the consensus, Citi analyst Carl McDonald said in another research note. He said the actual forecast will be viewed positively, given that the company has been conservative in recent years with its guidance.