Summary
Centene Corporation's (CNC) third-quarter 2023 filing indicates a period of revenue growth driven primarily by its Commercial Marketplace business and stable Medicaid operations, partially offset by ongoing divestitures. Total revenues reached $38.0 billion, a 6% increase year-over-year, with Premium and Service revenues growing 4% to $35.0 billion. The Health Benefits Ratio (HBR) improved to 87.0% from 88.3% in the prior year's quarter, signaling better cost management. However, the Selling, General & Administrative (SG&A) expense ratio slightly increased to 8.7% from 8.4%, influenced by the higher-cost Commercial segment. Net earnings attributable to Centene Corporation saw a notable decrease to $469 million ($0.87 diluted EPS) from $738 million ($1.27 diluted EPS) in the prior year's quarter, largely due to significant impairment charges totaling $440 million, including a $251 million charge related to the pending divestiture of Circle Health and a $142 million charge for the Operose Health business. Despite these one-time charges, the company's core operations demonstrate resilience, and its Value Creation Plan, which includes strategic divestitures and cost optimization, is progressing.
Financial Highlights
54 data points| Revenue | $38.04B |
| Cost of Revenue | $856.00M |
| Gross Profit | $4.63B |
| SG&A Expenses | $3.05B |
| Operating Expenses | $37.31B |
| Operating Income | $735.00M |
| Interest Expense | $181.00M |
| Net Income | $469.00M |
| EPS (Basic) | $0.87 |
| EPS (Diluted) | $0.87 |
| Shares Outstanding (Basic) | 539.53M |
| Shares Outstanding (Diluted) | 541.27M |
Key Highlights
- 1Total revenues grew 6% year-over-year to $38.0 billion, driven by the Commercial Marketplace business, though partially impacted by divestitures.
- 2Health Benefits Ratio (HBR) improved to 87.0% from 88.3% in Q3 2022, indicating better medical cost management.
- 3Net earnings attributable to Centene Corporation decreased to $469 million ($0.87 diluted EPS) from $738 million ($1.27 diluted EPS) in Q3 2022.
- 4Significant impairment charges of $440 million were recorded, primarily related to the pending divestiture of Circle Health ($251 million) and the Operose Health business ($142 million).
- 5Managed care membership increased by 1.2 million (5%) year-over-year, reaching 28 million, with strong growth in the Commercial Marketplace.
- 6The company continues to execute its Value Creation Plan, including strategic divestitures and stock repurchases totaling $1.6 billion year-to-date.
- 7Cash flow from operations remained strong, providing $7.8 billion year-to-date, supporting liquidity and financing activities.