On Oct. 27, Coventry Health Care (NYSE:CVH) released third-quarter earnings for the period ended Sept. 30.

  • Revenues missed analyst estimates by 3.3%, while EPS matched analyst estimates.
  • Coventry had 2.5 million total health plan members, a slight increase year over year. Revenue was up 14% to slightly more than $1.9 billion.
  • Net income growth of 10.9% lagged top-line growth due to falling margins.
  • EPS increased 13.6% to $0.92 on increased net profit and a decreased share count.
  • Free cash flow year to date grew 8.2%, to $703 million, on increased cash from operations.

(Figures in millions, except per-share data)

Income Statement Highlights

Avg. Est.

Q3 2006

Q3 2005

Change

Sales

$1,972

$1,909

$1,674

14%

Net Profit

--

$147.5

$133.1

10.9%

EPS

$0.92

$0.92

$0.81

13.6%

Diluted Shares

--

160.4

163.9

(2.1%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

30.13%

32.09%

(1.96)

Operating Margin

11.75%

12.54%

(0.79)

Net Margin

7.73%

7.95%

(0.22)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$1,407.6

$1,411.8

(0.3%)

Receivables

$362.7

$286.7

26.5%

Inventory

No Data

No Data

No Data


Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$342.9

$401.1

(14.5%)

Long-Term Debt

$760.5

$770.5

(1.3%)



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2006

YTD 2005

Change

Cash From Ops.

$750.5

$688.9

8.9%

Capital Expenditures

$47.7

$39.6

20.5%

Free Cash Flow

$702.8

$649.3

8.2%



Find out why Fools always follow the money.

Related Companies:

  • United Health Group (NYSE:UNH)
  • Wellpoint (NYSE:WLP)
  • Aetna (NYSE:AET)
  • Humana (NYSE:HUM)
  • Cigna (NYSE:CI)

Related Foolishness:

Coventry and UnitedHealth are Motley Fool Stock Advisor picks. Sign up today for a free report .

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