Centene (CNC) was falling Tuesday after the company’s medical costs exceeded analysts’ expectations and overshadowed earnings that beat analysts’ forecasts.
The stock traded at $61.93, down 6.17%, and has slumped 7% in the last six months, including Tuesday’s move.
Centene’s medical loss ratio, which reflects how much premium money goes to medical claims, hit 86.8% in the first quarter. While down from 88% a year earlier, the number surpassed analyst forecasts, said Evercore ISI analyst Michael Newshel.
Centene’s competitors topped estimates for this measure.
Still, the company registered profit of $699 million, or $1.19 a share, in the first quarter, up from $46 million, or 8 cents a share, last year.
Adjusted earnings for Centene totaled $1.63 a share in the latest quarter, besting the FactSet analyst consensus of $1.50 a share.
Centene's revenue gained 15% to $29.98 billion in the first quarter from $26.03 billion a year ago. The analyst consensus called for $29.5 billion in the latest quarter.
"Centene is off to a strong start in 2021, with solid revenue and earnings growth,” said CEO Michael Neidorff. “We are increasing our full-year guidance, driven by the positive first-quarter momentum and the tailwinds we expect to persist throughout the months ahead."
TheStreet’s Jim Cramer was bullish on Centene in February. "I always go with Centene. That's the one I prefer," he said on "Mad Money."
In January, the company said it agreed to buy Magellan Health for $95 a share in cash, giving the deal an enterprise value of $2.2 billion.