Centene (CNC) Tops Q1 EPS by 4c, Revenues Beat; Raises FY21 Revenues Guidance Above Consensus, Provides FY21 EPS Outlook

Centene (NYSE: CNC) reported Q1 EPS of $1.63, $0.04 better than the analyst estimate of $1.59. Revenue for the quarter came in at $29.98 billion versus the consensus estimate of $29.5 billion.

First Quarter Highlights

• March 31, 2021 managed care membership of 25.1 million, an increase of 1.3 million members, or 5%, compared to March 31, 2020.
• Total revenues of $30.0 billion for the first quarter of 2021, representing 15% growth compared to the first quarter of 2020.
• Health benefits ratio (HBR) of 86.8% for the first quarter of 2021, compared to 88.0% in the first quarter of 2020.
• Selling, general and administrative (SG&A) expense ratio of 8.4% for the first quarter of 2021, compared to 9.9% for the first quarter of 2020.
• Adjusted SG&A expense ratio of 8.1% for the first quarter of 2021, compared to 8.6% for the first quarter of 2020.
• Diluted EPS for the first quarter of 2021 of $1.19, compared to diluted EPS of $0.08 for the first quarter of 2020.
• Adjusted diluted EPS for the first quarter of 2021 of $1.63, compared to $0.86 for the first quarter of 2020.
• Operating cash flow of $43 million for the first quarter 2021, reflecting a $910 million delay in premium payments from one of our states.

"Centene is off to a strong start in 2021, with solid revenue and earnings growth. We are increasing our full-year guidance, driven by the positive first quarter momentum and the tailwinds we expect to persist throughout the months ahead," said Michael F. Neidorff, Chairman, President and Chief Executive Officer of Centene. "While we remain vigilant around the unique dynamics of the current operating environment, we are confident in the strength of our diversified healthcare enterprise and the compelling avenues for growth and value creation across our portfolio. We continue to drive forward our technology strategy and the combination with Magellan remains on track to close in the second half of 2021, providing us with additional capabilities to expand access to care and nurture a fully integrated model across behavioral and physical health."

GUIDANCE:

Centene sees FY2021 EPS of $5.05-$5.35, versus the consensus of $5.21. Centene sees FY2021 revenue of $120.1-122.1 billion, versus the consensus of $118.01 billion.

The Company's guidance has been updated to reflect the following:

• ongoing suspension of Medicaid eligibility redeterminations to August 1,
• the extensions of the California pharmacy services to July 1 and New York pharmacy services through 2022,
• the Marketplace special enrollment period,
• the recent Oklahoma contract awards,
• Medicare membership, sequestration, and the fee schedule increase, and
• updated expectations regarding state premium rate adjustments and risk sharing mechanisms.

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

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