(Nasdaq: HS)
How they did: HealthSpring Inc.’s earnings rose 33 percent in the fourth quarter compared to the same period a year ago, exceeding analysts’ expectations. The company saw a boost in its revenue from Medicare premiums, which increased 25.5 percent from last year to $663 million.
Why it matters: Membership in HealthSpring’s Medicare Advantage program grew 16.8 percent, to more than 189,000 members. Membership in the Tennessee program grew 16.7 percent, to 58,252 members.
What they said: “We are pleased with our operating results in 2009. Outperformance in most of our health plans and in our stand-alone prescription drug plan, coupled with continuing SG&A operating leverage, allowed us to close the year on a high note,” HealthSpring CEO Herb Fritch said. “Moving to 2010, our Medicare Advantage membership has increased despite the fact that we reduced benefits across many of our markets in response to Medicare rate cuts.”
What’s next: HealthSpring expects its earnings per diluted share for 2010 to be in the range of $2.25 to $2.50, on total revenue between $2.85 billion and $2.95 billion.
4th quarter 2009 earnings: $38.8 million, or 68 cents per diluted share
4th quarter 2008 earnings: $28.3 million, or 51 cents per diluted share
Change: 33.3 percent increase
4th quarter 2009 revenue: $667.6 million
4th quarter 2008 revenue: $540.8 million
Change: 23.4 percent increase
Market reaction: +74 cents, at $17.88 as of 9:08 a.m. Thursday. The 52-week range for the stock is $17.47 to $18.48.
About the company: HealthSpring owns and operates Medicare Advantage plans in Alabama, Florida, Illinois, Mississippi, Tennessee and Texas.
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