(Reuters) -Centene on Wednesday reported a surprise profit for the third quarter, helped by a low tax rate.
Shares of the company rose nearly 12% in premarket trading.
The health insurer also forecast 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 company said it recorded a non-cash goodwill impairment of $6.7 billion after a quantitative analysis, which resulted in a net loss of $13.50 per share in the third quarter.
Centene reported a medical cost ratio, the percentage of premiums spent on medical care, of 92.7% compared with analysts’ average estimate of 90.70%.
The company said the increase was mainly due to increased costs in its Obamacare plans as well as higher medical costs in Medicaid plans driven primarily by behavioral health and home health services.
On an adjusted basis, the company reported a quarterly profit of 50 cents per share, compared with analysts’ 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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