By Khushi Mandowara
(Reuters) -U.S. health insurer Centene (NYSE:CNC) Corp on Tuesday raised its 2024 adjusted profit forecast, bringing it broadly in line with Wall Street expectations, mainly due to higher premiums and expansion of its Medicaid business in two states.
The company's shares rose nearly 4% after it also added $4 billion to its buyback program.
Centene expects about $1 billion in annual revenue from providing Medicaid health insurance plans to low-income people in Oklahoma once it starts in April, Chief Financial Officer Drew Asher said at the company's investor day.
The company has also expanded its Medicaid business in North Carolina.
Meanwhile, Centene continues to expect a $7.5 billion hit to its 2024 revenue as many Medicaid members, who had signed up under pandemic-related relief measures, will be deemed ineligible, beginning April 1.
Rival UnitedHealth Group (NYSE:UNH) had in November forecast 2024 profit in line with market estimates.
Centene expects 2024 medical loss ratio, or the percentage of premiums paid out for medical services, between 87.3% and 87.9%, compared with LSEG estimates of 87.81%.
It now estimated 2024 adjusted profit of greater than $6.70 per share, compared with its previous forecast of greater than $6.60. Analysts on average were expecting a profit of $6.77 per share, according to LSEG data.
Centene expects adjusted profit to grow by an average of 12% to 15% annually over the long term, CEO Sarah London said.
The company projected 2024 revenue in the range of $142.5 billion to $145.5 billion, higher than analysts' estimate of $142.1 billion.
Centene has about $1.2 billion remaining under a previously announced share repurchase program.