Coventry Health Care Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Coventry Health Care (NYS: CVH) reported earnings on Feb. 8. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Coventry Health Care beat slightly on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share dropped significantly.

Margins shrank across the board.

Revenue details
Coventry Health Care booked revenue of $3.13 billion. The 14 analysts polled by S&P Capital IQ anticipated net sales of $3.07 billion. GAAP sales were 3.2% higher than the prior-year quarter's $3.03 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.60. The 19 earnings estimates compiled by S&P Capital IQ anticipated $0.63 per share. GAAP EPS of $0.60 for Q4 were 41% lower than the prior-year quarter's $1.01 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.1%, 370 basis points worse than the prior-year quarter. Operating margin was 4.8%, 320 basis points worse than the prior-year quarter. Net margin was 2.7%, 230 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $3.45 billion. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $13.84 billion. The average EPS estimate is $3.28.

Investor sentiment
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Coventry Health Care is outperform, with an average price target of $36.59.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Coventry Health Care. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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