Centene (CNC) Misses Q2 EPS by 3c, Revenues Miss; Offers FY20 Revenue Guidance Above Consensus

Centene (NYSE: CNC) reported Q2 EPS of $2.40, $0.03 worse than the analyst estimate of $2.43. Revenue for the quarter came in at $27.71 billion versus the consensus estimate of $27.58 billion.

Second Quarter Highlights

• June 30, 2020 managed care membership of 24.6 million, an increase of 9.6 million members, or 64%, over June 30, 2019.
• Total revenues of $27.7 billion for the second quarter of 2020, representing 51% growth compared to the second quarter of 2019.
• Health benefits ratio (HBR) of 82.1% for the second quarter of 2020, compared to 86.7% in the second quarter of 2019.
• Selling, general and administrative (SG&A) expense ratio of 8.8% for the second quarter of 2020, compared to 9.1% for the second quarter of 2019.
• Adjusted SG&A expense ratio of 8.5% for the second quarter of 2020, compared to 9.0% for the second quarter of 2019.
• Diluted EPS for the second quarter of 2020 of $2.05, compared to $1.18 for the second quarter of 2019.
• Adjusted Diluted EPS for the second quarter of 2020 of $2.40, compared to $1.34 for the second quarter of 2019.
• Operating cash flow of $3.7 billion for the second quarter 2020, representing 3.1x net earnings.

"I am pleased with our solid second quarter performance, which came in line with our expectations. Our performance underscores the impact of shelter in place policies on our diversified platform in addition to our team's solid execution in what continues to be a challenging operating landscape," said Michael F. Neidorff, Chairman, President and Chief Executive Officer of Centene.

"Looking ahead, while we expect the national economic trajectory to remain choppy as we move through the second half of the year, we believe that the return of utilization by our members seeking treatments will be regionally driven. We continue to provide the highest quality of care to our members during this critical time and are well-positioned to respond quickly to evolving dynamics as we execute on our growth strategy. We are further supported by the strength of our balance sheet and solid financial position."

GUIDANCE:

Centene sees FY2020 EPS of $4.76-$4.96, versus the consensus of $4.90. Centene sees FY2020 revenue of $109-111.4 billion, versus the consensus of $108.79 billion.

For earnings history and earnings-related data on Centene (CNC) click here.

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