Reuters: Global Markets: Centene cuts 2012 profit estimate on high medical costs

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Centene cuts 2012 profit estimate on high medical costs Dec 14th 2012, 12:18 Fri Dec 14, 2012 7:18am EST (Reuters) - Health insurer Centene Corp (CNC.N) slashed its estimated 2012 profit, citing higher medical costs related to an intensive flu season and in its Kentucky and Texas businesses. The insurer now estimates a 2012 profit of 10 cents to 20 cents per share, down from its forecast of 56 cents to 66 cents per share. The company has been facing trouble in its Kentucky and Texas Medicaid contracts, where medical costs were outstripping premium revenue. It exited the Kentucky contract earlier this year. Centene said it has discussed issues related to the Texas plan with the state and has received written confirmation acknowledging the issues, and a commitment to rectify the matter as soon as possible. "We anticipate any such adjustments will be made in the first quarter of 2013," the company said in a statement. Centene shares were down 4 percent in premarket trade. They closed at $44.97 on Thursday on the New York Stock Exchange. Rival Molina Healthcare Inc (MOH.N) has also been hit by high costs related to contracts in Texas. WellCare Health Plans Inc (WCG.N) also cut its full-year earnings forecast after its Kentucky Medicaid plan performed below expectations. For 2013, the company expects earnings of $2.60 to $2.90 per share, and premium and service revenue of $9.7 billion to $10.0 billion. Analysts are expecting a profit of $2.85 per share, on revenue of $10.35 billion, according to Thomson Reuters I/B/E/S. U.S. Health insurers have been bracing for a tough business environment in 2013 as they confront a high-single-digit unemployment rate and limited wage growth. (Reporting by Esha Dey in Bangalore, Additional reporting by Zeba Siddiqui; Editing by Roshni Menon) Link this Share this Digg this Email Reprints

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