The 10-second takeaway
For the quarter ended Sep. 30 (Q3), AMERIGROUP beat expectations on revenues and whiffed on earnings per share.
Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share shrank significantly.
Margins contracted across the board.
AMERIGROUP reported revenue of $2.45 billion. The 13 analysts polled by S&P Capital IQ expected sales of $2.39 billion on the same basis. GAAP reported sales were 53% higher than the prior-year quarter's $1.60 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.62. The 16 earnings estimates compiled by S&P Capital IQ anticipated $1.36 per share. GAAP EPS of $0.62 for Q3 were 35% lower than the prior-year quarter's $0.96 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 13.1%, 320 basis points worse than the prior-year quarter. Operating margin was 2.7%, 230 basis points worse than the prior-year quarter. Net margin was 1.3%, 170 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $2.42 billion. On the bottom line, the average EPS estimate is $1.26.
Next year's average estimate for revenue is $8.77 billion. The average EPS estimate is $3.84.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on AMERIGROUP is hold, with an average price target of $86.83.
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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 of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of Amerigroup. Motley Fool newsletter services recommend Amerigroup. 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.