You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Centene's (CNC) Q2 Earnings Miss Estimates, Improve Y/Y
Centene Corporation (CNC - Free Report) reported second-quarter 2021 adjusted earnings per share of $1.25, which missed the Zacks Consensus Estimate by 11.3%. However, the bottom line improved 47.9% year over year attributable to higher revenues.
In the second quarter, total revenues improved 12% year over year to $31 billion, led by the recent PANTHERx buyout, membership growth in the Medicare business and the continuing suspension of Medicaid eligibility redeterminations. The top line also outpaced the consensus mark by 3%.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote
Quarterly Operational Update
As of Jun 30, 2021, managed care membership totaled 25.4 million, which climbed 3% year over year.
In the reported quarter, Health Benefits Ratio (HBR) came in at 88.3%, which expanded 620 basis points (bps) year over year. The reason can primarily be attributed to reduced medical utilization trends stemming from the COVID-19 pandemic and higher utilization in the Marketplace business along with an unfavourable 2020 risk adjustment that took place in 2021.
Adjusted selling, general and administrative (SG&A) expense ratio was 7.7% in the quarter, down 80 bps year over year. The decline could be attributed to lower short-term variable compensation costs, leveraging of costs over higher revenues from increased Medicaid enrolment and a recent few buyouts.
Financial Update (as of Jun 30, 2021)
Total assets were up 4.1% from the 2020-end figure to $71.5 billion.
Centene’s long-term debt was $16.5 billion, which dipped 0.9% from the figure at 2020 end.
In the first six months of 2021, net cash provided by operating activities totaled $1.7 billion, down 50.3% year over year.
2021 Guidance Updated
Concurrent with second-quarter results, the company revised its full-year outlook.
For the current year, management anticipates revenues in the $123.3-$125.3 billion range, up from the previous band of $120.1-$122.1 billion.
In 2021, the company’s adjusted EPS is still expected to be $5.05-$5.35.
This year, HBR is forecast between 87.5% and 88.1% compared with the prior range of 87.1-87.7%.
The guidance for adjusted SG&A expense ratio now stands in the range of 8-8.4%.
Centene currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Among other players from the medical space that have reported second-quarter earnings so far, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Tenet Healthcare Corporation (THC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat estimates.