* Reiterates 2013 EPS forecast of $2.60-$2.90
* Maintains premium, service revenue view of $9.7 bln to $10
* Shares close up 6 pct
Feb 5 Health insurer Centene Corp's
fourth-quarter results were hurt by a severe flu season in the
United States, but the company backed its 2013 forecasts,
suggesting it was on the mend after setbacks in its key markets.
Shares of the company closed up 6 percent at $44.99 on
Tuesday on the New York Stock Exchange.
The company reiterated its current-year profit forecast of
between $2.60 to $2.90 per share, saying the flu costs would be
absorbed within the range of its guidance.
"Centene did not change its 2013 EPS (earnings per share)
guidance, which assumes a sharp recovery from 2012 due to rate
increases, quitting Kentucky, and new markets (such as) Kansas
and Illinois," Cantor Fitzgerald analyst Joseph France said in a
The company was hit by weak performance by its Medicaid
contracts in Texas and Kentucky in the fourth quarter. Centene
had cut its profit estimate for 2012 in December, citing high
medical costs in the two states.
The insurer intends to exit Kentucky from July 5.
Several health insurers providing Medicaid services in Texas
and Kentucky have experienced higher utilization of their
services in these states, thereby eating into profits.
Centene's net profit fell 70 percent to $9.1 million, or 17
cents per share, for the quarter ended Dec. 31 from a year
Analysts on average had expected earnings of 32 cents per
share, according to Thomson Reuters I/B/E/S.
Centene said the per-share net earnings included medical
costs related to the flu, which were 30 cents higher than the
previous year and 11 cents above the company's expectations.
Michael Neidorff, chief executive of Centene, said the
company's 2013 guidance remained unchanged as recent data from
the Centre for Disease Control and Prevention suggested that the
flu season peaked in mid-January.
On a conference call with analysts, Neidorff said
first-quarter results could be slightly hurt by a higher level
of flu costs.
Insurers take a hit from the flu because of an increase in
claims related to visits to doctors and hospitals.
Peer Humana Inc reported a drop in fourth-quarter
profit on Monday and said it was experiencing the worst flu
season in a decade that would cost $75 million for added
healthcare services such as hospitalizations.
Centene's total quarterly revenue, including premium and
services revenue, rose 59 percent to $2.4 billion, in line with
Health benefits ratio, a measure of medical expenses
expressed as a percentage of premium revenue, rose to 91.3
percent from 85.9 percent a year earlier.