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Centene Inc. (CNC - Free Report) reported first-quarter 2018 adjusted net income per share of $2.17, which beat the Zacks Consensus Estimate by 13%. Also, the bottom line improved 93% year over year.
For the first quarter, total revenues rose 13% to $13.2 billion from the year-ago period, primarily driven by growth in the Health Insurance Marketplace business in 2018 as well as expansions and new programs across many states in both 2017 and this year. Moreover, the top line slightly surpassed the Zacks Consensus Estimate by 0.01%.
Quarterly Operational Update
As of Mar 31, 2018, managed care membership came in at 12.8 million, a 6% increase over March 31, 2017.
Health Benefit Ratio (HBR) for the first quarter was 84.3% compared with 87.6% in the prior-year quarter. This reflects a year-over-year deterioration of 330 basis points (bps), stemming from membership growth in the Health Insurance Marketplace business, lower medical costs in Medicaid business and the reinstatement of the health insurer fee in 2018.
Adjusted Selling, General & Administrative (SG&A) expense ratio of 10.3% for the first quarter of 2018 compared with 9.3% for the first quarter of 2017. This represents a deterioration of 100 basis points year over year, arising from growth in the Health Insurance Marketplace business, operating at a higher SG&A expense ratio.
Centene Corporation Price, Consensus and EPS Surprise
Among other players in the Medical sector having reported first-quarter earnings so far, Novartis AG (NVS - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Abbott Laboratories (ABT - Free Report) surpassed the respective Zacks Consensus Estimate.
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Centene (CNC) Q1 Earnings & Revenues Top, '18 View Lowered
Centene Inc. (CNC - Free Report) reported first-quarter 2018 adjusted net income per share of $2.17, which beat the Zacks Consensus Estimate by 13%. Also, the bottom line improved 93% year over year.
For the first quarter, total revenues rose 13% to $13.2 billion from the year-ago period, primarily driven by growth in the Health Insurance Marketplace business in 2018 as well as expansions and new programs across many states in both 2017 and this year. Moreover, the top line slightly surpassed the Zacks Consensus Estimate by 0.01%.
Quarterly Operational Update
As of Mar 31, 2018, managed care membership came in at 12.8 million, a 6% increase over March 31, 2017.
Health Benefit Ratio (HBR) for the first quarter was 84.3% compared with 87.6% in the prior-year quarter. This reflects a year-over-year deterioration of 330 basis points (bps), stemming from membership growth in the Health Insurance Marketplace business, lower medical costs in Medicaid business and the reinstatement of the health insurer fee in 2018.
Adjusted Selling, General & Administrative (SG&A) expense ratio of 10.3% for the first quarter of 2018 compared with 9.3% for the first quarter of 2017. This represents a deterioration of 100 basis points year over year, arising from growth in the Health Insurance Marketplace business, operating at a higher SG&A expense ratio.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation Price, Consensus and EPS Surprise | Centene Corporation Quote
Financial Update (As of Mar 31, 2018)
Centene had cash and cash equivalents of $5.7 billion, up 39% from 2017 end.
Total assets of $25.2 billion grew 15%.
Centene’s long-term debt totaled $5.2 billion, up 10%.
At the end of the first quarter of 2018, cash inflow from operations was $1.8 billion, up 48% year over year.
2018 Guidance Updated
Centene expects adjusted earnings per share in the range of $6.75-$7.15, down from the previous projection of $6.95-$7.35.
Total revenues are anticipated in the band of $58.2-$59.0 billion, down from the earlier forecast of $60.6-$61.4 billion.
HBR is estimated at 85.9-86.4% compared with the past view of 86.2-86.7%
Adjusted SG&A expense ratio is predicted at 9.4-9.8%, up from the former outlook of 9.2-9.7%.
Zacks Rank and Performance of Peers
Centene carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Among other players in the Medical sector having reported first-quarter earnings so far, Novartis AG (NVS - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Abbott Laboratories (ABT - Free Report) surpassed the respective Zacks Consensus Estimate.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
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