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Centene's (CNC) Earnings and Revenues Top Estimates in Q3
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Centene Inc. (CNC - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.79, which beat the Zacks Consensus Estimate by 1.1%. Also, the bottom line improved 32.6% year over year. These encouraging results were mainly driven by the company’s execution of growth strategy and its solid operating metrics.
Centene Corporation Price, Consensus and EPS Surprise
For the third quarter, total revenues surged 36% to $16.2 billion from the year-ago period, primarily aided by a stronger Health Insurance Marketplace business in 2018, purchases, expansions and new programs across many states in 2018 as well as reinstatement of the health insurer fee in 2018. However, this upside was partially offset by the impact of the removal of in-home support services (IHSS) program from California's Medicaid contract in January 2018. Moreover, the top line surpassed the Zacks Consensus Estimate by 0.6%.
Quarterly Operational Update
As of Sep 30, 2018, managed care membership came in at 14.4 million, a 17% increase over the level as of Sep 30, 2017.
Health Benefit Ratio (HBR) for the reported quarter was 86.3% compared with 88.0% in the prior-year period. This contraction of 170 basis points (bps) is mainly due to the recognition of the previously mentioned IHSS program reconciliation, membership growth in the Health Insurance Marketplace business and the reinstatement of the health insurer fee in 2018. However, this downside was partially offset by the buyout of Fidelis Care.
Adjusted Selling, General & Administrative (SG&A) expense ratio of 10% for the third quarter of 2018 compared unfavorably with 8.9% for the same period last year. This represents a deterioration of 110 basis points year over year, arising from the expenses related to the previously mentioned Veterans Affairs contract expiration and other charity-related costs. Health Insurance Marketplace business also contributed to this downtrend, partially offset by the Fidelis buyout.
Financial Update
Centene had cash and cash equivalents of $6.8 billion, up 68.1% from the figure at 2017 end.
Total assets of $31.2 billion grew 42.6%.
Centene’s long-term debt totaled $6.3 billion, up 35.8%.
For the quarter under review, cash outflow from operations was $548 million.
2018 Guidance Updated
Centene expects adjusted earnings per share in the range of $6.90-$7.10, tightened from the previous projection of $6.80-$7.16.
Total revenues are anticipated in the band of $59.8-$60.3 billion, up from the earlier forecast of $59.2-$60 billion.
HBR is estimated at 85.9-86.3%.
Adjusted SG&A expense ratio is predicted at 9.7-10.1%, up from the former outlook of 9.4-9.9%.
Allergan plc’s is going to release third-quarter 2018 earnings on Oct 30 and its Earnings ESP stands at +2.89%. The company carries a Zacks Rank #3 (Hold).
Molina Healthcare, Inc. (MOH - Free Report) is set to report third-quarter 2018 earnings on Oct 31 and its Earnings ESP is pegged at +4.82%. The stock sports a Zacks Rank #1 (Strong Buy).
Acorda Therapeutics, Inc. is slated to announce third-quarter 2018 earnings on Oct 31. Its Zacks Rank of 3 and an Earnings ESP of +81.2% make it confident of an earnings surprise.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Centene's (CNC) Earnings and Revenues Top Estimates in Q3
Centene Inc. (CNC - Free Report) reported third-quarter 2018 adjusted earnings per share of $1.79, which beat the Zacks Consensus Estimate by 1.1%. Also, the bottom line improved 32.6% year over year. These encouraging results were mainly driven by the company’s execution of growth strategy and its solid operating metrics.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation Price, Consensus and EPS Surprise | Centene Corporation Quote
For the third quarter, total revenues surged 36% to $16.2 billion from the year-ago period, primarily aided by a stronger Health Insurance Marketplace business in 2018, purchases, expansions and new programs across many states in 2018 as well as reinstatement of the health insurer fee in 2018. However, this upside was partially offset by the impact of the removal of in-home support services (IHSS) program from California's Medicaid contract in January 2018. Moreover, the top line surpassed the Zacks Consensus Estimate by 0.6%.
Quarterly Operational Update
As of Sep 30, 2018, managed care membership came in at 14.4 million, a 17% increase over the level as of Sep 30, 2017.
Health Benefit Ratio (HBR) for the reported quarter was 86.3% compared with 88.0% in the prior-year period. This contraction of 170 basis points (bps) is mainly due to the recognition of the previously mentioned IHSS program reconciliation, membership growth in the Health Insurance Marketplace business and the reinstatement of the health insurer fee in 2018. However, this downside was partially offset by the buyout of Fidelis Care.
Adjusted Selling, General & Administrative (SG&A) expense ratio of 10% for the third quarter of 2018 compared unfavorably with 8.9% for the same period last year. This represents a deterioration of 110 basis points year over year, arising from the expenses related to the previously mentioned Veterans Affairs contract expiration and other charity-related costs. Health Insurance Marketplace business also contributed to this downtrend, partially offset by the Fidelis buyout.
Financial Update
Centene had cash and cash equivalents of $6.8 billion, up 68.1% from the figure at 2017 end.
Total assets of $31.2 billion grew 42.6%.
Centene’s long-term debt totaled $6.3 billion, up 35.8%.
For the quarter under review, cash outflow from operations was $548 million.
2018 Guidance Updated
Centene expects adjusted earnings per share in the range of $6.90-$7.10, tightened from the previous projection of $6.80-$7.16.
Total revenues are anticipated in the band of $59.8-$60.3 billion, up from the earlier forecast of $59.2-$60 billion.
HBR is estimated at 85.9-86.3%.
Adjusted SG&A expense ratio is predicted at 9.7-10.1%, up from the former outlook of 9.4-9.9%.
Zacks Rank
Centene carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Peer Releases
Allergan plc’s is going to release third-quarter 2018 earnings on Oct 30 and its Earnings ESP stands at +2.89%. The company carries a Zacks Rank #3 (Hold).
Molina Healthcare, Inc. (MOH - Free Report) is set to report third-quarter 2018 earnings on Oct 31 and its Earnings ESP is pegged at +4.82%. The stock sports a Zacks Rank #1 (Strong Buy).
Acorda Therapeutics, Inc. is slated to announce third-quarter 2018 earnings on Oct 31. Its Zacks Rank of 3 and an Earnings ESP of +81.2% make it confident of an earnings surprise.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>