Oct 27 (Reuters) - Centene raised its annual profit forecast after reporting better-than-expected third-quarter results, as cost control measures and higher premium revenues helped the health insurer offset the impact from a decline in membership.
Health insurers have grappled with rising medical costs in recent years as patients seek more care, putting pressure on profits and prompting companies to focus on cost controls.
Centene lowered its forecast for full-year medical cost ratio, a measure of
premiums spent on medical care, to 90.4% to 91.1%, from 90.5% to 91.3% previously.
Medical costs in the reported quarter, however, remained unchanged from last year at 92.7%. Analysts had expected a ratio of 92.84%.
Shares of the company were down about 3% in premarket trading.
The company said its quarterly medical costs benefited from improved pricing in its Obamacare plans, established under former President Barack Obama's Affordable Care Act, as well as better performance in its Medicare Advantage plans for older Americans.
"Solid underlying fundamentals within our core businesses have powered a faster recovery to our earnings trajectory than previously anticipated," said Centene CEO Sarah M. London.
The company now sees 2026 adjusted profit to be more than $5.20 per share, higher than its previous expectation of more than $4.80 per share. Analysts expect a profit of $4.88, per data compiled by LSEG.
On an adjusted basis, the company earned third-quarter profit of 58 cents per share, compared with analysts' average estimate of 10 cents.
(Reporting by Padmanabhan Ananthan and Sneha S K in Bengaluru; Editing by Shinjini Ganguli)
