Health insurer Centene's profit surges due to new contracts
(Reuters) - Health insurer Centene Corp reported a nearly six-fold rise in quarterly profit, helped by new contract wins and expansion of existing contracts.
Net earnings attributable to Centene rose to $53.2 million, or 93 cents per share, in the fourth quarter, from $9.1 million, or 17 cents per share, a year earlier.
Excluding discontinued operations, profit was 84 cents per share in the quarter ended December 31, ahead of analysts' estimates of 83 cents per share, according to Thomson Reuters I/B/E/S.
Premium and services revenue rose about 31 percent to $2.86 billion as Centene won new contracts in Kansas, California and New Hampshire, and expanded existing contracts in Mississippi, Ohio and Florida.
The company, which has posted better-than-expected profit every quarter in the last fiscal year, said it began serving members enrolled in health insurance exchanges in nine states in January.
Centene raised its full-year premium and service revenue forecast due to the health insurer fee under the Affordable Care Act and to account for the benefit from its acquisition of a majority stake in home health services provider U.S. Medical Management LLC.
The company now expects full-year premium and service revenue of $13.8-$14.3 billion, compared with the $13.5-$14.0 billion it forecast in December.
Centene maintained its 2014 earnings forecast of $3.50-$3.80 per share.
The company's health benefits ratio, a measure of medical expenses expressed as a percentage of premium revenue, fell to 88.1 percent in the quarter from 90.7 percent a year earlier, partly due to increased premium rates in Texas.
Total revenue, which includes premium tax, rose to $2.93 billion from $2.27 billion.
Centene's shares closed at $59.11 on Monday on the New York Stock Exchange.
(Reporting By Vrinda Manocha in Bangalore; Editing by Saumyadeb Chakrabarty and Savio D'Souza)
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