Centene Reports Higher Net Income on Increased Revenues

Centene Corp. (NYSE: CNC), a provider of managed care programs to state governments, Tuesday reported earnings of $15.9 million for the third quarter of 2007 compared with a loss in the same quarter a year ago.

Centene attributed the profit to the absence of an $87 million write-down that sent third quarter 2006 earnings to a loss. Centene last year lost a contract to administer the Medicaid program in the state of Kansas and was forced to write off the loss in the quarter.

Centene’s revenues increased 18.8 percent to $749.9 million in the third quarter of 2007 from $631.2 million last year.

Centene manages Medicare, Medicaid, State Children’s Health Insurance Program (SCHIP) and other healthcare-related programs for a number of states. The Health Benefits Ratio (HBR) for Centene’s Medicaid and SCHIP populations, which reflects medical costs as a percent of premium revenues, was 79 percent on a gross basis, lower than the 82 percent reported in the same period a year ago.

Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer, said in a statement, “During the third quarter, overall results for revenue, membership growth and earnings were consistent with our expectations, and our Medicaid and SCHIP HBR improved by 160 basis points sequentially.”

HBR is a commonly-used metric in the healthcare business to reflect how much money received through premiums is paid to cover participant’s medical care. A lower HBR generally means higher earnings for managed care providers.