Centene Corp. cut its 2012 earnings forecast again Friday, as the Medicaid coverage provider cited higher-than-expected health care use in Texas, problems with coverage in Kentucky and the flu season.
The St. Louis company's stock plunged in midday trading and after it made the announcement.
Centene now expects 2012 earnings of 10 to 20 cents per share, down from a forecast it made in October for earnings of 56 cents to 66 cents per share. That already represented a steep drop from a forecast it made in April for full year earnings of $2.64 to $2.84 per share.
The insurer still expects 2012 premium and service revenue to range between $8.1 billion and $8.3 billion.
Analysts surveyed by FactSet expect, on average, earnings of $1.50 per share on $8.57 billion in revenue. Their earnings estimates do not count the company's losses in Kentucky.
Company shares dropped 8.2 percent, or $3.67, to $41.30 in Friday afternoon trading.
Centene administers Medicaid coverage in several states. Medicaid is the state and federally funded program that provides health coverage to poor and disabled people.
The company said it saw higher-than-expected use in part of its Texas business, and its performance there also was hurt by another health plan's efforts to shift expensive patients to competitors. Centene didn't name the health plan.
Centene also has struggled this year with claims in Kentucky. The insurer said in October it was suing Kentucky over the state's "failure to completely and accurately disclose material information," and it was planning to end its Medicaid contract there.
The lawsuit alleged, among other things, that Kentucky officials misrepresented the volume of Medicaid neonatal intensive care admissions and emergency room use when the subsidiary was preparing a bid to cover the population. Those categories generate expensive claims for insurers. The state of Kentucky declined comment on Centene's claims at the time.
Centene also has said it was struggling with a large amount of retroactively assigned members in Kentucky. Those are uninsured patients who are assigned to a Medicaid coverage provider after they show up at a hospital to seek care.
The insurer also said Friday it cut its forecast again due to "an earlier and more intensive" flu season in its biggest markets. The onset of the flu season can drive up claims or costs for insurers.
Centene will report 2012 earnings on Feb. 5.
For 2013, Centene expects earnings to range between $2.60 and $2.90 per share on premium and service revenue of between $9.7 billion and $10 billion.
Analysts expect, on average, earnings of $2.85 per share on about $10.29 billion in revenue.
BMO Capital analyst Dave Shove said in a research note the company's 2013 forecast shows that Centene officials believe they can move past the cost problems early next year. However, he also said that that could prove challenging since Medicaid is scheduled to expand starting in 2014 under the health care overhaul.