Centene Shares Jump On Better Than Expected Q4 Earnings, Reaffirms FY22 Guidance

Centene Shares Jump On Better Than Expected Q4 Earnings, Reaffirms FY22 Guidance

Centene Corporation CNC has reported Q4 adjusted EPS of $1.01, slightly beating the consensus estimate of $0.99.

  • Sales increased 15% Y/Y to $32.57 billion, almost in line with the consensus of $32.50 billion.
  • Health Benefits Ratio of 87.9% decreased from 88.4% a year ago, benefitting from reduced COVID-19 associated testing and treatment costs and lower retroactive state premium rate adjustments.
  • Managed care membership reached 26.6 million, +4% Y/Y.
  • Centene generated an operating cash flow of $675 million in Q4 and $4.2 billion for FY21, representing 3.1 times net earnings for FY21.
  • The Cost of Service ratio was 86.0% compared to 88.5%, driven by the acquisition of the Circle Health business, which operates at a lower cost of service ratio.
  • FY 2022 Guidance: Centene reaffirmed its FY22 sales of $135.9 billion - $137.9 billion, compared to the consensus of $136 billion.
  • The Company expects adjusted EPS of $5.30 - $5.50, versus the consensus of $5.44.
  • Price Action: CNC shares are trading 2.96% at $83.18 during the premarket session on the last check Tuesday.
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