Summary
Centene Corporation (CNC) reported a significant turnaround in its financial performance for the first quarter of 2017 compared to the same period in 2016. Total revenues surged by 69% to $11.7 billion, primarily driven by the acquisition of Health Net completed in March 2016, along with organic growth from new programs and expansion in the Health Insurance Marketplace. The company also demonstrated strong operational efficiency improvements, with the health benefits ratio (HBR) decreasing to 87.6% from 88.7% year-over-year. This improvement is attributed to the Health Net acquisition's favorable mix of commercial business and growth in the Health Insurance Marketplace. Centene reported a substantial increase in operating cash flows to $1,248 million, up from $196 million in the prior year, reflecting improved earnings and effective working capital management. Financially, Centene has transitioned from a net loss of $(16) million in Q1 2016 to a net earning of $139 million in Q1 2017. Diluted EPS also showed a dramatic improvement, rising from $(0.13) to $0.79. The company's balance sheet shows total assets increased to $21.4 billion from $20.2 billion, supported by increased cash and cash equivalents and a robust investment portfolio. Management highlighted strong membership growth and strategic expansion initiatives as key drivers for future growth.
Financial Highlights
50 data points| Revenue | $11.72B |
| SG&A Expenses | $1.09B |
| Operating Expenses | $11.48B |
| Operating Income | $240.00M |
| Interest Expense | $62.00M |
| Net Income | $139.00M |
| EPS (Basic) | $0.40 |
| EPS (Diluted) | $0.39 |
| Shares Outstanding (Basic) | 344.15M |
| Shares Outstanding (Diluted) | 351.67M |
Key Highlights
- 1Total revenues increased 69% year-over-year to $11.7 billion, largely due to the Health Net acquisition.
- 2Net earnings attributable to Centene Corporation improved significantly, swinging from a loss of $16 million in Q1 2016 to a profit of $139 million in Q1 2017.
- 3Diluted EPS rose to $0.79 in Q1 2017, compared to a loss of $(0.13) in Q1 2016.
- 4Health benefits ratio (HBR) improved to 87.6% from 88.7% in the prior year, indicating better cost management.
- 5Operating cash flow showed a substantial increase, reaching $1,248 million in Q1 2017, compared to $196 million in Q1 2016.
- 6Managed care membership grew by 605,000 members (5%) year-over-year to 12.1 million.
- 7The company successfully navigated regulatory uncertainties surrounding the Affordable Care Act (ACA) and continued to execute its growth strategy through various state contracts and market expansions.