Coventry Health 2Q Profit Surges On Fewer Litigation Impacts

Date : 07/29/2011 @ 7:23AM
Source : Dow Jones News
Stock : Coventry Health Care, Inc. (CVH)
Quote : 49.99  0.0 (0.00%) @ 2:05AM

Coventry Health 2Q Profit Surges On Fewer Litigation Impacts

Coventry Hlth Care (NYSE:CVH)
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Coventry Health Care Inc.'s (CVH) second-quarter earnings soared amid fewer litigation-related impacts as the managed-care company reported stronger revenue, though the portion of premiums that went to pay medical costs continued to rise.

The health-care industry had been benefiting from consumers lighter use of fewer health-care products and services amid concerns about a sluggish economy and high unemployment. Coventry in the first-quarter had reported a slight increase in the portion of premiums used to cover medical costs.

In the latest quarter, Coventry's medical-expense ratio, or the percentage of premium revenue used to pay patient bills, was up at 82.1% from 79.1% a year earlier and but lower than 82.6% in the first quarter.

Coventry reported a profit of $224.5 million, or $1.51 a share, down from $1 million, or a penny a share, a year earlier. Excluding items, litigation-related adjustments, earnings fell to 83 cents from $1.01. Revenue increased 5.8% to $3.03 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of 76 cents on revenue of $3.01 billion.

Total membership declined 6.7% to 4.6 million as of June 30 from 4.9 million a year earlier.

Shares closed Thursday at $34.67 and were inactive premarket. The stock is up 84% in the past year.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; Tess.Stynes@dowjones.com

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