The health insurer boosted forecasts as lower medical costs and improved pricing drove stronger-than-expected quarterly results.
Centene Corp increased its annual profit and revenue projections after reporting second-quarter earnings that surpassed analyst estimates. The company cited improved cost management, including a medical loss ratio of 89.6%, down from 93% a year earlier and below the 91.3% consensus forecast.
The insurer attributed the lower costs to better pricing of its Affordable Care Act plans and higher risk-adjustment payments. The results follow three years of industry-wide pressure from elevated medical expenses, though recent declines in Marketplace enrollment have added new challenges.
Shares rose 2% in premarket trading following the announcement, reflecting investor optimism about the company’s margin recovery trajectory.