HNT Health Net Inc.

Centene Corp., a Medicaid-focused health insurer, reported its profit rose 5.7% in the final quarter of the year as a key measure of the company's medical costs fell and the company boosted its number of managed care members, but it also lowered its guidance for the year.

For 2016, assuming the previously announced merger with Health Net Inc. closes March 1, the company now expects adjusted earnings of $4.05 to $4.40 a share on revenue of $40 billion to $40.8 billion. Last month, the company had forecast earnings of $4.10 to $4.40 a share on revenue of $41.2 billion and $42 billion.

The company said that its Medicaid business grew 30% to include 3.5 million members.

Membership rose to 5.1 million from 4.1 million a year earlier.

It medical-loss ratio, or the share of premiums paid out for members' health expenses, shrank to 88% for the quarter, compared with 89.3% a year ago.

Overall, the company posted a profit of $111 million, or 91 cents a share, up from $105 million or 88 cents a share a year earlier. Excluding Health Net merger expenses, adjusted earnings were 95 cents a share.

Revenue jumped 34% to $6.3 billion.

Last month, the company had forecast adjusted earnings of 95 cents a share on $6.3 billion in revenue.

Earlier this month, the company's shareholders approved Centene's $6.3 billion merger with Health Net. St. Louis-based Centene is looking for the deal to boost its presence in California and other western states.

Also this month, Centene reached an agreement with Centurion of Florida LLC to provide correctional health care services for the Florida Department of Corrections in three regions. The contract is expected to begin in the second quarter.

Last month, the company disclosed a security breach resulting from an employee failing to follow the company's storage protocol. The six missing hard drives contain restricted information, including Social Security numbers and health information of nearly a million customers.

Shares of Centene, which have fallen 12% over the past three months, were inactive premarket.

Write to Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

February 09, 2016 08:05 ET (13:05 GMT)

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