A prolonged scandal in which a health insurer is accused of defrauding children and the poor apparently is not good for its quarterly earnings. Such, at least, is the case with
, whose profits continued to be weighed down in the first quarter by an ongoing scandal.
The health insurance provider recorded a loss of $36.9 million, or 89 cents a share, compared with a profit of $1.3 million, or 3 cents, a year ago.
The news sent shares down 7% to $18.84 in afternoon trading.
Excluding costs related to investigations, WellCare said earnings were $12.3 million, or 29 cents a share in the first quarter. Analysts expected earnings of 18 cents.
Revenue rose 10% to $1.8 billion from $1.64 billion on higher premiums.
WellCare last week agreed to pay $80 million to avoid criminal prosecution for health care fraud. The Tampa-based company has been charged with engaging in an elaborate scheme to defraud the Florida Medicaid program and Florida Healthy Kids Corporation of about $40 million.
But the investigation is not over, and executives and employees could still be charged. As a result, the company refused to provide full-year outlook.
WellCare has been under government investigation since October 2007 and restated its results from 2004 to 2007.
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