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Centene (CNC) Sharply Lowers FY Guidance On Higher Medical Costs

 December 14, 2012 07:04 AM
 


(By Balachander) Centene Corp. (NYSE: CNC) sharply slashed its earnings outlook for full year 2012, citing an increase in medical costs.

The St. Louis, Missouri-based multiline healthcare company now expects earnings per share (EPS) in the range of 10 cents to 20 cents from prior expectations of 56 cents to 66 cents for 2012.

Wall Street analysts, on average, expect CNC to earn $1.47 for the 12 months ending December 2012.

Centene continues to expect premium and service revenue between $8.1 billion and $8.3 billion.

The company said the lowered forecast is based on an earlier and more intensive flu season in its largest markets as well as an increase to its premium deficiency reserve for Kentucky.

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In Texas, the off-cycle transfer of higher acuity members from another health plan and higher than anticipated utilization in the company's Hidalgo Star and Medicaid Rural Service Areas (MRSA) business, Centene said.

For the year 2013, Centene forecasts EPS between $2.60 and $2.90 on premium and service revenue in the range of $9.7 billion to $10.0 billion. Analysts expect EPS of $2.85 on revenue of $10.3 billion.

Centene will report 2012 results on February 5, 2013.

The stock, which has been trading in the 52-week range of $24.26 to $50.98, ended at $44.97 on Thursday.

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