Wednesday, February 6, 2013

Centene profit falls 70 percent on high flu costs

(Reuters) - Health insurer Centene Corp reported a 70 percent drop in profit due to higher costs associated with a severe flu season in the United States and a weak performance by its Medicaid contracts in Texas and Kentucky.

Net profit fell to $9.1 million, or 17 cents per share, for the quarter ended December 31, from $30.1 million, or 57 cents per share, a year earlier.

Analysts on average expected earnings of 32 cents per share, according to Thomson Reuters I/B/E/S.

Total revenue rose 59 percent to $2.4 billion of which premium and services revenue brought in $2.3 billion.

Insurers take a hit from the flu because of an increase in claims related to visits to doctors and hospitals. The flu season began earlier than usual this year, and typically insurers spend hundreds of millions by the end of the season.

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 reiterated its 2013 profit forecast of $2.60 to $2.90 per share.

Shares of the company closed at $43.8 on Monday on the Nasdaq.

(This version of the story was corrected to remove reference to adjusted earnings of 47 cents per share. The net profit of 17 cents per share is comparable with analysts' estimates.)

(Reporting By Vrinda Manocha in Bangalore; Editing by Roshni Menon)

Source: http://news.yahoo.com/centene-profit-falls-70-percent-high-flu-costs-200122855.html

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