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WellCare Health Plans Expects Robust Revenue Performance in 2017

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Revenue performance in 1Q17

In 1Q17, WellCare Health Plans (WCG) reported revenues of around $3.9 billion, which totals year-over-year (or YoY) growth of ~11.7%. The company also reported adjusted diluted earnings per share (or EPS) close to $1.61, which is 52% higher on a YoY basis.

This performance was significantly driven by solid demand, especially for the company’s Medicare health plans, Medicaid health plans, and Medicare prescription drug plans (or PDPs). These plans and the business added through the acquisition of Care1st Arizona completed on December 31, 2016, have resulted in 13.5% YoY growth in WellCare Health Plan’s adjusted premium revenues in 1Q17.

If WellCare Health Plans (WCG) can demonstrate solid revenue performance during the remainder of 2017, this trend could have a favorable impact on the company’s stock price and on the SPDR S&P MidCap 400 ETF (MDY). WCG makes up about 0.46% of MDY’s total portfolio holdings.

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Revenue projections for 2017

Wall Street analysts expect WellCare Health Plans to report revenues close to $16.8 billion in 2017, which is a YoY rise of ~18.3%. A significant portion of this growth is expected to be driven by increasing demand for the company’s traditional Medicare Advantage (or MA) plans, as well as for Dual Eligible Special Needs Plans (or D-SNPs) plans.

Additionally, the recently closed acquisition of Universal American Corp. also added a healthy Accountable Care Organization (or ACO) business to WellCare Health Plans’ portfolio.

In 2017, WCG’s peers Humana (HUM), Aetna (AET), and Cigna (CI) are expected to earn revenues close to $54.1 billion, $60.9 billion, and $40.8 billion, respectively.

In the next article, we’ll discuss WellCare Health Plans’ Medicaid business in greater detail.

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