Centene Corp. is an operator in two major markets: Medicare Managed Care and Specialty Services. Their stock plunged when they forecasted a loss led by unexpected rising costs and claims in May, as well as possible additional write-downs in Kentucky, Texas, and their Celtic branches. A week ago, Molina Healthcare (MOH), one of Centene’s largest competitors, withdrew its’ earnings report due to high margin pressure for it’s Texas division, foreshadowing CNC’s outlook.
CNC’s 1202 earnings outlook fell from $1.45 to $1.65 a share, down from its original outlook of $2.64 to $2.84 a share. CNC has a market capitalization of $1.83 billion and a P/E ratio of 16.81. Although Centene’s current outlook is dimmed by its’ Kentucky, Texas and Celtic divisions, it is confident that will return to profitability by the end of the year.
David Cornes holds a degree in Economics from the University of Montana.