Amerigroup cites swine flu for lower 3Q profit

VIRGINIA BEACH, Va. (AP) — Health insurer Amerigroup Inc. on Friday said its profit sank in the third quarter because of higher medical costs associated with the swine flu.

For the three months ending Sept. 30, the company earned $22.5 million, or 43 cents per share, compared with $37.9 million, or 71 cents per share, in the year-ago period.

Quarterly revenue rose to $1.3 billion from $1.1 billion.

On average, analysts polled by Thomson Reuters expected a profit of 45 cents per share on revenue of $1.32 billion.

Amerigroup said the swine flu drove up emergency room services, ambulatory surgery and physician services in the third quarter. As a result, health benefits expenses were 87.5 percent of premium revenues, versus 82 percent in the third quarter of 2008, the company said.

The benefits ratio was further elevated because of the swine flu's virulence among children, pregnant women and other high-risk population groups — groups that represent the majority of Amerigroup's 1.8 million members.

In a release, CEO and chairman James G. Carlson noted that the swine flu, "like the recession, will eventually fade."

Shares of Amerigroup fell $1.18, or 5.2 percent, to $21.56 in afternoon trading. The stock has ranged from $17.42 to $32.40 over the past year.