Amerigroup Corp., citing stable medical costs and strong membership growth, said Wednesday that its first-quarter net income climbed 65 percent. However, the Virginia Beach-based managed-care company scaled back its earnings guidance for 2008.
Amerigroup said its earnings will be reduced by noncash charges related to discontinuing operations in western Tennessee and its planned departure from the District of Columbia market. For the January-through-March quarter, Amerigroup reported net income of $35.09 million, compared with $21.29 million in the year-earlier period. Diluted earnings per share rose to 65 cents from 40 cents.
The company, which specializes in serving beneficiaries of Medicaid and other government-funded programs, reduced its guidance for 2008 earnings to between $2.35 and $2.45 a diluted share. That was down from its earlier guidance of $2.46 to $2.61.
Earlier this month, Amerigroup said it suspended work on a new contract in Washington, D.C., because of a disagreement with the city over calculations of rates and costs. On Tuesday, Tennessee chose other bidders over Amerigroup to provide managed-care services in western Tennessee.
Amerigroup bought a Medicaid managed-care plan in Memphis last year as part of its plan to expand to that region. Amerigroup's share price rose 26 cents in heavy trading Wednesday to close at $26.75.
Tom Shean, (757) 446-2379, tom.shean@pilotonline.com
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