10-QPeriod: Q3 FY2017

CENTENE CORP Quarterly Report for Q3 Ended Sep 30, 2017

Filed October 24, 2017For Securities:CNC

Summary

Centene Corporation's Q3 2017 filing shows robust top-line growth driven by increased membership, particularly in government-sponsored programs. Total revenues reached $11.9 billion, a 10% increase year-over-year, fueled by an 8% rise in managed care membership to 12.3 million. The company reported net earnings attributable to Centene Corporation of $205 million for the quarter, a significant increase from $147 million in the prior year. Diluted EPS also saw a healthy jump to $1.16 from $0.84. This performance was supported by an 88.0% health benefits ratio (HBR) and an improved selling, general, and administrative (SG&A) expense ratio of 9.0%. A notable event is the definitive agreement to acquire Fidelis Care for $3.75 billion, expected to close in early 2018, which is poised to expand Centene's presence in New York. The company continues to navigate regulatory trends and uncertainties, including potential changes to the Affordable Care Act, while demonstrating its capacity to grow and adapt.

Financial Highlights

53 data points
Beta

Revenue

$11.90B

96.3% Gross Margin

Net Income

$205.00M

1.7% Net Margin

EPS (Diluted)

$0.58

Total Assets

$22.00B

Cash & Equivalents

$4.29B

Free Cash Flow

-$23.00M

Financial Statements
Beta
Revenue$11.90B
Cost of Revenue$437.00M
Gross Profit$11.46B
SG&A Expenses$1.03B
Operating Expenses$11.56B
Operating Income$340.00M
Interest Expense$65.00M
Net Income$205.00M
EPS (Basic)$0.59
EPS (Diluted)$0.58
Shares Outstanding (Basic)345.02M
Shares Outstanding (Diluted)353.83M

Key Highlights

  • 1Total revenues increased by 10% to $11.9 billion in Q3 2017 compared to Q3 2016.
  • 2Managed care membership grew by 8% year-over-year to 12.3 million members as of September 30, 2017.
  • 3Net earnings attributable to Centene Corporation were $205 million, up from $147 million in the prior year's quarter.
  • 4Diluted earnings per share (EPS) rose to $1.16 from $0.84 year-over-year.
  • 5The Health Benefits Ratio (HBR) was 88.0%, an increase from 87.0% in Q3 2016.
  • 6The SG&A expense ratio improved to 9.0% from 9.2% in Q3 2016.
  • 7Centene signed an agreement to acquire Fidelis Care for $3.75 billion, expected to close in Q1 2018.

Frequently Asked Questions

Centene Corporation reported strong revenue growth, with total revenues increasing by 10% to $11.9 billion year-over-year. Net earnings attributable to Centene Corporation were $205 million, a significant increase from $147 million in the same period last year. Diluted earnings per share also improved to $1.16 from $0.84.

Managed care membership increased by 8% compared to the prior year, reaching 12.3 million members as of September 30, 2017. This growth was driven by expansions and new programs across various states, including strong performance in the Health Insurance Marketplace.

Centene entered into a definitive agreement to acquire Fidelis Care for $3.75 billion. This strategic acquisition is expected to significantly expand Centene's health plan presence in New York State and is anticipated to close in the first quarter of 2018.

The Health Benefits Ratio (HBR) was 88.0% for the third quarter of 2017, compared to 87.0% in the prior year's quarter. The Selling, General, and Administrative (SG&A) expense ratio improved to 9.0% from 9.2% year-over-year, indicating improved operational efficiency.