Investing.com -- Centene Corporation stock surged 10.5% in early trading on Friday after the healthcare company reported third-quarter earnings and revenue that exceeded analyst expectations.
The managed care provider posted adjusted earnings per share of $1.62 for Q3, surpassing the consensus estimate of $1.41. Revenue came in at $42.02 billion, well above analysts' projections of $38.02 billion.
Centene (NYSE:CNC)'s strong performance was driven by 6% growth in premium and service revenues to $36.9 billion. This increase was primarily attributed to Medicaid rate hikes and significant membership gains in the company's Marketplace business.
"Our diversified portfolio has allowed us to successfully navigate a dynamic landscape in the quarter," said Centene CEO Sarah M. London. She noted the company delivered on fundamentals that bode well for its multi-year earnings trajectory.
Membership in Centene's Commercial Marketplace segment jumped 22% YoY to 4.5 million. Medicare Prescription Drug Plan enrollment surged 49% to 6.8 million members compared to Q3 2023.
The company reaffirmed its 2024 adjusted EPS guidance floor of greater than $6.80, slightly below the $6.82 consensus. Full year revenue is seen between $159 billion and $161 billion.
Centene's health benefits ratio increased to 89.2% from 87.0% a year ago, driven by higher acuity in Medicaid due to the redetermination process. The company repurchased $1.2 billion of shares in Q3 and an additional $380 million in October.