Amerigroup profit is down, but revenue projection is up

Amerigroup Corp. said Friday that its third-quarter income tumbled 43 percent because of rising health-care costs.

However, shares of the Virginia Beach-based health insurer jumped 10 percent in heavy trading after Amerigroup executives estimated that the company's 2012 revenue will grow 40 percent because of its continued expansion. Its share price closed at $55.59, up $4.80 for the day.

Amerigroup said it earned $48.1 million during the July-through-September quarter, down from $84.35 million in the comparable period last year. Earnings per share were 96 cents, compared with $1.68 in a year earlier. That surpassed the 67 cents that analysts estimated the company would earn.

Revenue from premiums rose 7 percent to $1.6 billion from $1.49 billion in the same quarter last year. Amerigroup, which provides managed care for 2 million beneficiaries of Medicaid and other government-funded health care programs in 11 states, said its premium revenue was bolstered by $20.4 million of retroactive revenue from Georgia and New York.

As a percent of its premium revenue, Amerigroup's health benefits expense climbed in the third quarter to 83.9 percent from a lower, more favorable 80.5 percent in last year's third quarter.