Summary
Centene Corporation (CNC) reported strong financial performance for the first quarter of 2021, with total revenues reaching $30.0 billion, a 15% increase year-over-year, driven by a full quarter of WellCare results and continued suspension of Medicaid eligibility redeterminations. The company also saw significant improvements in profitability, with diluted earnings per share (EPS) rising to $1.19 from $0.08 in the prior year period, and adjusted diluted EPS increasing to $1.63. This performance was supported by a lower Health Benefits Ratio (HBR) of 86.8% and a reduced Selling, General & Administrative (SG&A) expense ratio of 8.4%, reflecting improved operational efficiencies and the repeal of the Health Insurer Fee (HIF). Key growth drivers included strategic acquisitions like Apixio and PANTHERx, expansion in the Health Insurance Marketplace, and increased Medicaid membership. The company also provided positive outlook for future growth, anticipating benefits from ongoing acquisitions, the extension of the Health Insurance Marketplace special enrollment period, and new contract wins. Centene remains focused on its acquisition of Magellan Health, expected to close in the second half of 2021, which aims to broaden its whole health capabilities. Despite some headwinds such as a delay in premium payments from New York and a decrease in Medicare Star quality ratings, the company's robust revenue growth and enhanced profitability highlight its strategic execution and market position.
Financial Highlights
53 data points| Revenue | $29.98B |
| Cost of Revenue | $1.05B |
| Gross Profit | $28.93B |
| SG&A Expenses | $2.23B |
| Operating Expenses | $28.93B |
| Operating Income | $1.05B |
| Interest Expense | $170.00M |
| Net Income | $699.00M |
| EPS (Basic) | $1.20 |
| EPS (Diluted) | $1.19 |
| Shares Outstanding (Basic) | 581.87M |
| Shares Outstanding (Diluted) | 589.34M |
Key Highlights
- 1Total revenues grew 15% year-over-year to $30.0 billion, driven by acquisitions and expanded Medicaid membership.
- 2Diluted EPS surged to $1.19 from $0.08 in Q1 2020, with adjusted diluted EPS at $1.63.
- 3Health Benefits Ratio (HBR) improved to 86.8% from 88.0% in the prior year, indicating better medical cost management.
- 4SG&A expense ratio decreased to 8.4% from 9.9% year-over-year, driven by efficiencies and revenue leverage.
- 5Managed care membership increased by 1.3 million (5%) year-over-year to 25.1 million.
- 6The company announced plans to acquire Magellan Health for approximately $2.2 billion, expanding its behavioral health capabilities.
- 7Operating cash flows of $43 million were impacted by a $910 million delay in premium payments from New York state.