Summary
Centene Corporation (CNC) reported a strong rebound in its financial performance for the second quarter and first half of 2013 compared to the prior year. Total revenues grew significantly, driven by a substantial increase in premium and service revenues, up 27.8% for the quarter and 39.0% for the first six months. This growth was fueled by new contract wins and expansions in several states, including Kansas, Louisiana, Mississippi, Missouri, Texas, and Washington, as well as the strategic acquisition of AcariaHealth, Inc. The company also demonstrated improved operational efficiency, with a notable decrease in its Health Benefits Ratio (HBR) to 88.8% for the quarter, down from 92.9% in the prior year, indicating better management of medical costs relative to premium revenues. While General and Administrative (G&A) expenses saw an increase, the G&A expense ratio remained relatively stable, benefiting from revenue leverage. These factors contributed to a significant turnaround in earnings from operations, shifting from a loss in the prior year to a healthy profit in the current periods.
Financial Highlights
50 data points| Revenue | $2.61B |
| Operating Expenses | $2.54B |
| Operating Income | $68.74M |
| Interest Expense | $7.03M |
| Net Income | $40.00M |
| EPS (Basic) | $0.18 |
| EPS (Diluted) | $0.17 |
| Shares Outstanding (Basic) | 218.12M |
| Shares Outstanding (Diluted) | 226.41M |
Key Highlights
- 1Total revenues increased by 29.1% for the three months ended June 30, 2013, and 40.5% for the six months ended June 30, 2013, compared to the prior year periods.
- 2The company completed the acquisition of AcariaHealth, Inc. in April 2013 for $146.6 million, financed through a combination of stock and cash.
- 3At-risk managed care membership grew by 12.5% year-over-year to 2,696,900 members as of June 30, 2013.
- 4The Health Benefits Ratio (HBR) improved significantly to 88.8% for the second quarter of 2013, compared to 92.9% in the same period of 2012.
- 5Earnings from operations turned positive, reaching $67.0 million for the second quarter and $107.1 million for the first six months of 2013, a substantial improvement from losses in the prior year.
- 6The company entered into a new $500 million revolving credit facility in May 2013, enhancing its financial flexibility.
- 7Net earnings attributable to Centene Corporation were $39.5 million for the second quarter of 2013, a significant improvement from a net loss of $35.0 million in the prior year.