Shares of managed care provider WellCare Health Plans gained 8.7% to $90 in AH trading Monday after the company posted a 49% rise in Q1 profit on the back of strong membership growth in Medicare and Medicaid. WellCcare posted earnings of $25 million ($0.60/share) versus $16.8 million ($0.42) in the a year-ago period. Revenue was up 70% to $1.24 billion from $730.4 million the year before. Analysts were expecting EPS of $0.56 on revenue of $1.2 billion. WellCare is projecting Q2 EPS of $1.20-1.25 on revenue of $1.3 billion. The company has raised its full-year 2007 revenue forecast to $5.2 billion from $4.95 billion and its full-year EPS forecast to $4.65-4.75 from $4.10-4.20. Medicaid membership was up 53% to 1.17 billion and Medicare's was up 42% to 1.1 billion. WellCare gained 445 million new members in Georgia and 33 million new members in Ohio after the introduction of new programs that offset losses in membership in Florida and Indiana.
Sources: MarketWatch, MoneyCentral, Forbes, Reuters
Commentary: WellCare Health Plans' Day of Reckoning May Have Arrived • Jim Cramer's Mad Money Lightning Round Picks, May 1
Stocks/ETFs to watch: WellCare Health Plans, Inc. (WCG). Competitors: AMERIGROUP Corp. (AGP), Centene Corp. (CNC), Coventry Health Care Inc. (CVH). ETFs: PowerShares Dynamic Healthcare Services (PTJ), PowerShares Dynamic Aggressive Growth (PGZ), PowerShares Dynamic MagniQuant (PIQ)
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