Shares of Centene Corp. soared Friday morning after the Medicaid coverage provider forecast a 2014 earnings range that extended well beyond average Wall Street expectations.
The St. Louis company said its outlook for the new year does not include its now discontinued Kentucky business, which had been dragging down the company's results and led to litigation. Centene left the state earlier this year.
Centene said its 2014 forecast also excludes a fee that insurers will have to pay next year due to the health care overhaul, the massive federal law that aims to help millions of uninsured people gain coverage. The company said excluding the fee allows for a better comparison between the years.
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Overall, Centene expects 2014 earnings to range between $3.50 and $3.80 per share on $13.5 billion to $14 billion in premium and service revenues.
Analysts forecast, on average, earnings of $3.61 per share on $13.77 billion in revenue.
Centene, which is holding its annual investor meeting Friday, also said it raised the lower end of its 2013 guidance and said it now expects earnings of $2.81 to $2.87 per share. Analysts predict $2.83 per share.
The insurer runs Medicaid coverage in several states. Medicaid is the state and federally funded program that provides health coverage to poor and disabled people. States hire private insurers to administer the coverage.
Shares of Centene jumped 6 percent, or $3.27, to $57.53 in midmorning trading. Meanwhile the Standard & Poor's 500 index fell slightly.
The stock had already climbed about 32 percent so far this year, as of Thursday's close.
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