On April 27, Coventry Health Care (NYSE:CVH) released first-quarter earnings for the period ended March 31.

  • Revenues increased by 15.4%, thanks to an increase in membership and higher managed care premiums.
  • The company repurchased 4 million shares at a cost of $221.3 million during the quarter.
  • On April 7, Coventry acquired workers' compensation managed care services business units from Concentra Operating Corporation; on April 27, it agreed to acquire certain group health insurance businesses from Mutual of Omaha.
  • For the second quarter, Coventry estimates total revenues of about $2.3 billion to 2.4 billion, with diluted EPS in the range of $0.94-$0.96.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$2,236.5

$1,938.7

15.4%

Net Profit

$121.7

$121.0

0.6%

EPS

$0.76

$0.74

2.7%

Diluted Shares

159.6

163.3

(2.3%)

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

25.9%

27.7%

(1.8)

Operating Margin

8.1%

9.4%

(1.4)

Net Margin

5.4%

6.2%

(0.8)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$3,292.4

$2,354.2

39.9%

Accounts Rec.

$212.8

$209.8

1.4%

Inventory

No Data

No Data

No Data

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable*

$442.8

$422.0

4.9%

Long-Term Debt

$978.5

$760.5

28.7%

*Accounts payable includes accrued liabilities.

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

$483.6

$490.6

(1.4%)

Capital Expenditures

$3.0

$26.8

(88.7%)

Free Cash Flow

$480.6

$463.8

3.6%

Free cash flow is a Fool's best friend.

Related Foolishness:

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