February 4, 2020 / 11:46 AM / in 21 days

UPDATE 1-Centene posts quarterly revenue above estimates on strength in Medicaid

(Adds details on quarter, analysts estimates)

Feb 4 (Reuters) - Centene Corp posted better-than-expected quarterly revenue on Tuesday, as it added more members in its Medicaid business, which sells health plans to low-income people.

The company said it added 1.07 million members to its health insurance plans in 2019, taking the total to 15.24 million.

However, Centene's health benefits ratio, the amount it spends on medical claims compared with its income from premiums, worsened to 88.4% from 86.8% a year earlier. Analysts on average had expected a ratio of 87.60%, according to Refinitiv IBES data.

Medical costs surged on the back of higher-than-expected expenses during the flu season, the company said.

Centene divested its Illinois unit to CVS Health Corp to pave the way for its deal to buy smaller rival Wellcare Health Plans.

The company hopes the deal, which closed last month, will bolster its Medicare and Medicaid businesses, while reducing exposure to Obamacare healthcare exchanges.

Net earnings attributable to Centene fell to $209 million, or 49 cents per share, in the quarter ended Dec. 31 from $241 million, or 57 cents per share, a year earlier.

The company reported adjusted earnings per share of 73 cents, which was in line with analysts' estimates.

Total revenue rose to $18.86 billion from $16.56 billion. Analysts were expecting $18.43 billion. (Reporting by Manojna Maddipatla and Tamara Mathias in Bengaluru; Editing by Maju Samuel and Anil D'Silva)

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