Insurer Centene's 1Q profit rises 1 percent
ST. LOUIS—Centene Corp.'s first-quarter profit inched up as a jump in expansion-related costs offset a 41 percent revenue increase for the Medicaid coverage provider. The company raised its 2012 earnings forecast.
The St. Louis company said Tuesday that its net income rose to $24 million, or 45 cents per share, in the three months ended March 31, up from $23.7 million, or 46 cents per share, a year ago.
Revenue climbed to $1.71 billion from $1.22 billion, as the insurer collected $1.66 billion in premium and service revenues.
Analysts surveyed by FactSet expected, on average, earnings of 48 cents per share on $1.68 billion in revenue.
Medicaid is the state and federally funded program that provides coverage for the needy and disabled. It also makes up the largest portion of enrollment for Centene, which has members in 13 states.
The company's membership rose 38 percent to about 2.2 million, as it added members in Kentucky and Louisiana and expanded its presence in Texas with an additional 370,000 people. It said that expansion contributed to its general and administrative costs, which rose 16 percent in the quarter to $163.2 million.
The insurer's medical costs climbed 47 percent to $1.4 million.
Centene now expects 2012 earnings of $2.64 to $2.84 per share, compared to its February forecast of $2.60 to $2.80 per share. It raised guidance on its premium and service revenues to a range of $7.7 billion to $8.1 billion from $7.2 billion to $7.6 billion.
Analysts surveyed by FactSet expect, on average, earnings of $2.75 per share on $7.59 billion in revenue.