Investors' confidence was boosted because the Clayton managed care provider's revised earnings guidance was higher than analysts' expectations.
Centene blamed higher medical costs in Ohio, a few high-cost medical providers in the Northeast and a busy flu season for the drop in quarterly profits. Continued higher expenses in Ohio and a drop in investment income will contribute to the company's lower-than-expected profit for the year, Centene said.
Centene said it's working hard to lower medical costs by ending one of its contracts with the state of Ohio, doing on-site reviews of all hospitals in the Northeast region and conducting more extensive case management of some of the costliest patients.
Centene said it expects its recent acquisition of Celtic Insurance will position the company for any expansion of health benefits provided by the government under the country's next president. Centene traditionally has worked with state Medicaid health programs for the poor. Celtic provides mostly individual insurance coverage to those who are not offered it through their employers.
Centene said it expects 2008 revenue of $3.3 billion to $3.375 billion and earnings per share of $1.87 to $1.97. Analysts had expected 2008 revenue of $3.47 billion and earnings of $1.85 per share.
mjfeldstein@post-dispatch.com
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