(Reuters) -Centene on Wednesday raised its annual earnings forecast after reporting a third-quarter surprise profit, helped by a low tax rate, sending its shares more than 10% higher in premarket trading.
The company also recorded a non-cash goodwill impairment of $6.7 billion after a quantitative analysis that resulted in a net loss of $13.50 per share in the third quarter.
President Donald Trump’s tax and budget bill had various implications, including potential membership impacts to the Medicaid business as well as the non-renewal of premium tax credits for Obamacare plans, Centene said.
These factors, as well as a steep decline in the company’s share price, which are down 45% so far this year, prompted it to conduct the analysis, it said.
“Centene shares appear to be reversing the losses from the past week since that fear of a guidance cut has not come to fruition,” said Morningstar analyst Julie Utterback.
The company now sees 2025 adjusted profit of at least $2.00 per share, above its previous forecast of about $1.75. Analysts had estimated a profit of $1.68, as per data compiled by LSEG.
The tax rate for the third quarter was 0.6% compared with 22.9% a year ago.
The company reported third-quarter adjusted profit of 50 cents per share, compared with estimates of a loss of 14 cents.
(Reporting by Sneha S K and Sriparna Roy in Bengaluru; Editing by Shinjini Ganguli)
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