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