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Centene (CNC) Beats Q1 Earnings on HealthNet Acquisition
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Centene Inc. (CNC - Free Report) reported first-quarter 2017 adjusted net income per share of $1.12 cents, which beat the Zacks Consensus Estimate by 5.7%. Earnings also improved 51.26% year over year, primarily on the back of higher revenues.
Adjusted net earnings from continuing operations soared nearly 100% year over year to $197 million at the end of the quarter.
Operational Update
In the first quarter, Centene’s total revenue increased 69% year over year to $11.7 billion, primarily due to the acquisition of Health Net. The impact of expansions and new programs in some states in 2016 and 2017 also supported the upside. Growth in the Health Insurance Marketplace business in 2017 also drove top-line growth.
Health Benefit Ratio (HBR) of 87.6% declined from 88.7% in the prior-year quarter. This was primarily due to the acquisition of Health Net, which operates at a lower HBR due to a greater mix of commercial business. Growth in the Health Insurance Marketplace business in 2017 was another factor impacting the metric.
In the first quarter, Selling, General and Administrative (SG&A) expense ratio of 9.8% improved 150 basis points (bps) year over year.
Excluding the Penn Treaty assessment and Health Net acquisition-related expenses, SG&A expense ratio of 9.3% deteriorated 100 bps year over year. This deterioration primarily stemmed from the addition of the Health Net business, which operates at a higher SG&A ratio due to a greater mix of commercial and Medicare business.
Centene Corporation Price, Consensus and EPS Surprise
As of Mar 31, 2017, Centene had cash and cash equivalents of $4.8 billion, up 23% year over year. Total assets of $21.4 billion also grew 6% year over year at the end of the first quarter.
As of Mar 31, 2017, Centene’s long-term debt totaled $4.6 billion, down 0.2% year over year.
In the reported quarter, operating cash flow was $1.25 million compared with $196 million in the last-year quarter.
Anthem is set to report its results on Apr 26, Avinger is set to release earnings on May 3. and Select Medical is scheduled to report results on May 4.
Zacks’ Best Private Investment Ideas
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Centene (CNC) Beats Q1 Earnings on HealthNet Acquisition
Centene Inc. (CNC - Free Report) reported first-quarter 2017 adjusted net income per share of $1.12 cents, which beat the Zacks Consensus Estimate by 5.7%. Earnings also improved 51.26% year over year, primarily on the back of higher revenues.
Adjusted net earnings from continuing operations soared nearly 100% year over year to $197 million at the end of the quarter.
Operational Update
In the first quarter, Centene’s total revenue increased 69% year over year to $11.7 billion, primarily due to the acquisition of Health Net. The impact of expansions and new programs in some states in 2016 and 2017 also supported the upside. Growth in the Health Insurance Marketplace business in 2017 also drove top-line growth.
Health Benefit Ratio (HBR) of 87.6% declined from 88.7% in the prior-year quarter. This was primarily due to the acquisition of Health Net, which operates at a lower HBR due to a greater mix of commercial business. Growth in the Health Insurance Marketplace business in 2017 was another factor impacting the metric.
In the first quarter, Selling, General and Administrative (SG&A) expense ratio of 9.8% improved 150 basis points (bps) year over year.
Excluding the Penn Treaty assessment and Health Net acquisition-related expenses, SG&A expense ratio of 9.3% deteriorated 100 bps year over year. This deterioration primarily stemmed from the addition of the Health Net business, which operates at a higher SG&A ratio due to a greater mix of commercial and Medicare business.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation Price, Consensus and EPS Surprise | Centene Corporation Quote
Financial Update
As of Mar 31, 2017, Centene had cash and cash equivalents of $4.8 billion, up 23% year over year. Total assets of $21.4 billion also grew 6% year over year at the end of the first quarter.
As of Mar 31, 2017, Centene’s long-term debt totaled $4.6 billion, down 0.2% year over year.
In the reported quarter, operating cash flow was $1.25 million compared with $196 million in the last-year quarter.
Zacks Rank and Performance of Other Insurers
Centene currently carries a Zacks Rank #3 (Hold).
Investors can also consider some better ranked stocks from the medical sector that include Select Medical Holdings Corp. (SEM - Free Report) , Anthem Inc. and Avinger, Inc. (AVGR - Free Report) . All of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Anthem is set to report its results on Apr 26, Avinger is set to release earnings on May 3. and Select Medical is scheduled to report results on May 4.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.
Click here for Zacks' private trades >>