Coventry Health profit up 3 percent

NEW YORK (Reuters) - Insurer Coventry Health Care Inc (CVH.N) posted a 3 percent first-quarter profit increase on Friday, matching Wall Street estimates, helped by higher membership.

The company forecast second-quarter earnings below analyst estimates but backed its full-year outlook, which it reduced in March.

Shares rose more than 2 percent in morning trading.

The results follow a mostly gloomy first-quarter reporting season for large U.S. health insurers, whose shares have been battered amid profit warnings and fears of a downturn.

First-quarter net earnings rose to $125 million, or 81 cents per share, from $121.7 million, or 76 cents per share, a year ago. The latest results matched analysts' expectations, according to Reuters Estimates.

Revenue jumped 31 percent to $2.94 billion, helped by acquisitions.

Membership stood at 4.68 million at the end of the quarter, up 14 percent from a year ago, but only slightly higher than the end of 2007.

Coventry's medical loss ratio, the percent of premiums spent on medical costs, worsened to 82.5 percent from 81.9 percent a year ago. However, it came in better than the 83.3 percent expected by analysts at JP Morgan.

Bethesda, Maryland-based Coventry forecast second-quarter earnings of $1.03 to $1.04 per share. Analysts expected $1.10.

It continued to predict full-year earnings of $4.39 to $4.50 per share. Analysts looked for $4.43.

In March, Coventry cut its 2008 forecast, citing the impact of the flu on medical costs and pressure on net investment income, but expressed confidence in all of its business lines.

Earlier this week, UnitedHealth Group Inc (UNH.N) and WellPoint Inc (WLP.N) posted disappointing quarterly results and cut their 2008 outlooks. Aetna (AET.N) met Wall Street's expectations and reaffirmed its full-year forecast, although its second-quarter outlook was weaker than expected.

Coventry shares rose $1.19, or 2.8 percent, to $44.19 on the New York Stock Exchange.

Coventry shares have fallen 27 percent this year, outperforming a 35 percent drop for the Morgan Stanley Healthcare Payor index. .HMO

(Reporting by Lewis Krauskopf; Editing by Steve Orlofsky and Jeffrey Benkoe)