ST. LOUIS (AP) -- Centene Corp.'s first-quarter earnings fell 4 percent as higher medical costs countered enrollment-fueled revenue gains for the Medicaid coverage provider, but the performance topped Wall Street expectations.
The St. Louis company said Tuesday that the number of people it covers jumped 25 percent to nearly 2.7 million, as Centene expanded in Texas, Mississippi and Louisiana. It also started work in Kansas, Missouri and Washington.
People covered by Medicaid make up the largest portion of Centene's enrollment. Medicaid is the state and federally funded program that provides health coverage to poor and disabled people. States typically hire private insurers to administer the coverage.
These contracts can generate high expenses, which Centene saw last year when a subsidiary lost millions of dollars administering Medicaid coverage in Kentucky. In this year's first quarter, Centene's medical costs climbed 57 percent to $2.27 billion, in part due to higher costs from the flu and expenses from the new business.
Overall, the insurer earned $23 million, or 42 cents per share, in the three months that ended March 31. That compares with earnings of about $24 million, or 45 cents per share, in last year's quarter.
Premium and service revenue climbed 53 percent to $2.54 billion. Total revenue, which includes premium tax, approached $2.65 billion.
Analysts expected, on average, earnings of 38 cents per share, on about $2.4 billion in revenue, according to FactSet.
Centene also said Tuesday that it raised the range of premium and service revenue it expects this year to $10.1 billion to $10.4 billion. That's up from the forecast of $9.7 billion to $10 billion it made in January. The company still expects earnings to range between $2.60 and $2.90 per share.
Analysts expect, on average, earnings of $2.62 per share on $10.49 billion in revenue.