Citing Swine Flu Costs, Amerigroup Cancels Outlook

VIRGINIA BEACH, Va. (AP) — Health insurer Amerigroup Corp. said its medical costs jumped in the third quarter due to the swine flu, which will lead to smaller profits in the third quarter and full year 2009.

Amerigroup withdrew its 2009 profit guidance and called for a third-quarter profit that was well below Wall Street estimates. The company mostly handles Medicaid business, and it said most Medicaid members face a high risk of swine flu infection.

The company canceled its annual profit guidance of $2.55 to $2.75 per share, and said it expects to earn between 42 cents and 44 cents per share in the third quarter. On average, analysts expected $2.10 per share for the year, and 51 cents per share in the third quarter, according to Thomson Reuters.

"The company is withdrawing its guidance for the current year due to the wide range of medical cost outcomes that may occur in the fourth quarter," Amerigroup said.

The insurer said it has about 1.7 million members, and 87 percent of them are in a high risk group for swine flu. Those groups include children and pregnant women.

In afternoon trading, Amerigroup shares lost 93 cents, or 4.1 percent, to $21.66.