Coventry Health profit tops forecasts
* Q2 EPS ex items 68 cents vs 63-cent Wall Street view
* Backs FY earnings forecast
July 27 (Reuters) - Insurer Coventry Health Care Inc posted higher-than-expected quarterly profit on Friday, helped by an increase in members in its Medicare plans for seniors and improvement in its struggling Medicaid low-income plan in Kentucky.
Second-quarter net income fell to $91.7 million, or 65 cents per share, from $224.5 million, or $1.50 per share, a year before, when the company's benefited from a legal settlement.
Excluding items, earnings of 68 cents per share were 5 cents above the average analysts' estimate, according to Thomson Reuters I/B/E/S.
Revenue rose 16 percent to $3.52 billion.
Coventry cited improvement in its Medicaid plan in Kentucky, which weighed heavily on its first-quarter results as costs ran well above premiums.
Coventry had said it had ended up attracting more high-cost members to the Kentucky Medicaid plan because it was offering a broader network of hospitals and other health providers, as well as a prescription drug plan with no co-payment.
In the second quarter, costs in the Kentucky plan amounted to 110.8 percent of premiums -- below the 120.9 percent in the first quarter.
"Coventry's misstep in Kentucky appears to be improving, but is not yet fully resolved," Wells Fargo analyst Peter Costa said in a research note. "Meanwhile the rest of its business seems to be performing mostly in-line with expectations."
Enrollment in Coventry's Medicare Advantage plans was 253,000 at the end of June, up 16 percent from a year earlier.
Coventry backed its full-year earnings forecast of a range of $3.10 per share to $3.30 per share.
Health insurers' earnings season has been rocky so far. UnitedHealth Group Inc's profit topped analyst estimates, but executives' cautious comments about reimbursement and tough competition sent company shares lower.
Earlier this week, WellPoint Inc's shares tumbled after its profit missed forecasts and it cut its full-year earnings outlook. WellPoint pointed to intensifying health plan competition pressuring its membership and rising health claim costs.
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