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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