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Centene Corporation (CNC - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.83, which surpassed the Zacks Consensus Estimate by 8.9%. The bottom line improved 12.3% year over year.
CNC’s first-quarter results benefited from top-line growth stemming from 22% improvement in premium and service revenues. Uptick in managed care membership contributed to the sound quarterly performance of the health insurer. However, the upside was partly offset by escalating operating expenses resulting from higher medical costs, cost of services and premium tax expense.
Centene Corporation Price, Consensus and EPS Surprise
Total revenues of Centene rose 24% year over year to $37.2 billion in the first quarter. The improvement can be attributed to organic Medicaid growth, strong Medicare membership growth, buyouts of Magellan Health and Circle Health, and initiation of CNC’s contracts in North Carolina. The top line beat the consensus mark by 7.2%.
Managed care membership grew 8% year over year to 26.2 million as of Mar 31, 2022.
Health Benefits Ratio (HBR) of 87.3% deteriorated 50 basis points (bps) year over year in the quarter under review. Traditional Medicaid medical utilization returning to more normalized levels somewhat dampened the metric. However, the same was partly driven by pricing actions and reduced traditional utilization in the Marketplace business.
Meanwhile, total operating expenses escalated 24.2% year over year to $35.9 billion. Selling, general and administrative (SG&A) expenses of $2.7 billion increased 22.9% year over year in the first quarter.
Adjusted SG&A expense ratio was 7.7%, which deteriorated 10 bps year over year in the quarter under review. Inclusion of Magellan Health and Circle Health businesses partly weighed on the metric, which was somewhat offset by higher membership and retroactive state directed payments leading to leveraging of expenses over increased revenues.
Financial Update (as of Mar 31, 2022)
Cash and cash equivalents of Centene totaled $11.2 billion in the first quarter, which plunged 14.3% from the 2021-end level.
Total assets of $82.9 billion increased 5.8% from the figure at the 2021 end.
CNC’s long-term debt inched up 0.4% from the 2021-end level to $18.6 billion.
Total stockholders’ equity amounted to $27.3 billion, which grew 1.4% from the 2021-end figure.
Repurchase Update
During the first quarter, Centene bought back common shares worth $71 million.
2022 Guidance Hiked
Based on continued strength across Centene’s business and revised expectations about Medicaid redeterminations’ timing, the health insurer upped its view for 2022 with respect to certain metrics.
Management now forecast revenues to lie within $139.9 billion and $141.9 billion, higher than the prior guidance of $135.9-$137.9 billion. The mid-point of the revised guidance indicates 11.8% growth from the 2021 figure.
Premium and service revenues are anticipated between $132.3 billion and $134.3 billion, up from the earlier view of $129.8-$131.8 billion. The mid-point of the revised guidance hints toward a 13% rise from the 2021 figure.
Adjusted diluted EPS is projected to be $5.40-$5.55, higher from the previous outlook of $5.30-$5.50. The mid-point of the altered guidance suggests 6.3% improvement from the 2021 figure.
CNC maintains its view for 2022 with respect to HBR and adjusted SG&A expense ratio. While it continues to expect HBR between 87.6% and 88.2%, adjusted SG&A expense ratio is estimated to lie within 7.8-8.3%.
Of the Medical sector players that have reported first-quarter results so far, the bottom line of UnitedHealth Group Incorporated (UNH - Free Report) , Anthem, Inc. and Tenet Healthcare Corporation (THC - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. UNH’s bottom line improved 3.4% year over year, courtesy of growing revenues. Revenues of UnitedHealth Group were $80.1 billion, which climbed 14.2% year over year and beat the Zacks Consensus Estimate by 1.9%.
Anthem reported first-quarter 2022 earnings of $8.25 per share, which outpaced the Zacks Consensus Estimate of $7.81 by 5.6%. ANTM’s bottom line improved 17.7% year over year. Operating revenues of Anthem in the first quarter totaled $37.9 billion, which rose 18% year over year and surpassed the consensus mark by 1.4%.
Tenet Healthcare reported first-quarter 2022 adjusted net earnings of $1.93 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 85.6%. THC’s bottom line rose 48.5% year over year. Net operating revenues of Tenet Healthcare beat the Zacks Consensus Estimate 1.5% to $4.7 billion. However, the figure dipped 0.8% year over year.
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Centene (CNC) Q1 Earnings Beat Estimates, Ups '22 EPS View
Centene Corporation (CNC - Free Report) reported first-quarter 2022 adjusted earnings per share of $1.83, which surpassed the Zacks Consensus Estimate by 8.9%. The bottom line improved 12.3% year over year.
CNC’s first-quarter results benefited from top-line growth stemming from 22% improvement in premium and service revenues. Uptick in managed care membership contributed to the sound quarterly performance of the health insurer. However, the upside was partly offset by escalating operating expenses resulting from higher medical costs, cost of services and premium tax expense.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote
Quarterly Operational Update
Total revenues of Centene rose 24% year over year to $37.2 billion in the first quarter. The improvement can be attributed to organic Medicaid growth, strong Medicare membership growth, buyouts of Magellan Health and Circle Health, and initiation of CNC’s contracts in North Carolina. The top line beat the consensus mark by 7.2%.
Managed care membership grew 8% year over year to 26.2 million as of Mar 31, 2022.
Health Benefits Ratio (HBR) of 87.3% deteriorated 50 basis points (bps) year over year in the quarter under review. Traditional Medicaid medical utilization returning to more normalized levels somewhat dampened the metric. However, the same was partly driven by pricing actions and reduced traditional utilization in the Marketplace business.
Meanwhile, total operating expenses escalated 24.2% year over year to $35.9 billion. Selling, general and administrative (SG&A) expenses of $2.7 billion increased 22.9% year over year in the first quarter.
Adjusted SG&A expense ratio was 7.7%, which deteriorated 10 bps year over year in the quarter under review. Inclusion of Magellan Health and Circle Health businesses partly weighed on the metric, which was somewhat offset by higher membership and retroactive state directed payments leading to leveraging of expenses over increased revenues.
Financial Update (as of Mar 31, 2022)
Cash and cash equivalents of Centene totaled $11.2 billion in the first quarter, which plunged 14.3% from the 2021-end level.
Total assets of $82.9 billion increased 5.8% from the figure at the 2021 end.
CNC’s long-term debt inched up 0.4% from the 2021-end level to $18.6 billion.
Total stockholders’ equity amounted to $27.3 billion, which grew 1.4% from the 2021-end figure.
Repurchase Update
During the first quarter, Centene bought back common shares worth $71 million.
2022 Guidance Hiked
Based on continued strength across Centene’s business and revised expectations about Medicaid redeterminations’ timing, the health insurer upped its view for 2022 with respect to certain metrics.
Management now forecast revenues to lie within $139.9 billion and $141.9 billion, higher than the prior guidance of $135.9-$137.9 billion. The mid-point of the revised guidance indicates 11.8% growth from the 2021 figure.
Premium and service revenues are anticipated between $132.3 billion and $134.3 billion, up from the earlier view of $129.8-$131.8 billion. The mid-point of the revised guidance hints toward a 13% rise from the 2021 figure.
Adjusted diluted EPS is projected to be $5.40-$5.55, higher from the previous outlook of $5.30-$5.50. The mid-point of the altered guidance suggests 6.3% improvement from the 2021 figure.
CNC maintains its view for 2022 with respect to HBR and adjusted SG&A expense ratio. While it continues to expect HBR between 87.6% and 88.2%, adjusted SG&A expense ratio is estimated to lie within 7.8-8.3%.
Zacks Rank
Centene currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported first-quarter results so far, the bottom line of UnitedHealth Group Incorporated (UNH - Free Report) , Anthem, Inc. and Tenet Healthcare Corporation (THC - Free Report) beat the Zacks Consensus Estimate.
UnitedHealth Group reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. UNH’s bottom line improved 3.4% year over year, courtesy of growing revenues. Revenues of UnitedHealth Group were $80.1 billion, which climbed 14.2% year over year and beat the Zacks Consensus Estimate by 1.9%.
Anthem reported first-quarter 2022 earnings of $8.25 per share, which outpaced the Zacks Consensus Estimate of $7.81 by 5.6%. ANTM’s bottom line improved 17.7% year over year. Operating revenues of Anthem in the first quarter totaled $37.9 billion, which rose 18% year over year and surpassed the consensus mark by 1.4%.
Tenet Healthcare reported first-quarter 2022 adjusted net earnings of $1.93 per share, which surpassed the Zacks Consensus Estimate of $1.04 by 85.6%. THC’s bottom line rose 48.5% year over year. Net operating revenues of Tenet Healthcare beat the Zacks Consensus Estimate 1.5% to $4.7 billion. However, the figure dipped 0.8% year over year.