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Centene Rises After Affirming Earnings Guidance

Centene stock is higher after the insurer affirms its 2021 annual earnings forecast days after paying settlements to Ohio and Mississippi.
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Centene  (CNC)  advanced on Wednesday after the health-care insurer's annual earnings forecasts came within analysts' estimates.

Shares of the St. Louis company at last check were 5.1% higher at $73.56.

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The company affirmed its full-year 2021 adjusted-earnings estimate of $5.05 to $5.35 a share. The FactSet consensus calls for earnings of $5.23 a share.

Centene, the country's largest seller of Medicaid health plans, said it expected 2022 full-year revenue of $124 billion. 

The FactSet estimate is calling for $126 billion in revenue, while the Bloomberg consensus is looking for a range of $117.53 billion to $133.55 billion.

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The company, which had 1.93 million members as of Jan. 1, is targeting at least 3.3% adjusted net income margin by 2024.

The report comes days after Centene agreed to pay settlements to Ohio and Mississippi over claims that it inflated pharmacy costs.

Centene will pay $88 million to Ohio and $55 million to Mississippi in restitution. The company denies liability for the practices for which it is settling. Centene also said it reserved $1.1 billion to resolve similar claims in other states.

In April, 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.

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, in the year-earlier quarter.

Centene agreed in January to buy Magellan Health  (MGLN)  for $95 a share cash. The deal's enterprise value was $2.2 billion.