February 4, 2014 / 11:36 AM / 4 years ago

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

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below