Centene Says It Is Positioned To Capture Long-Term Growth In Government-Sponsored Healthcare, Lifts Annual Outlook

On Friday, Centene Corporation CNC third-quarter sales of $42.02 billion, up 10.5% year-over-year, beating the consensus of $37.69 billion.

Centene earned an adjusted EPS of $1.62 during the quarter, beating the consensus of $1.38.

For the third quarter of 2024, premium and service revenues increased 6% to $36.9 billion, primarily driven by Medicaid rate increases and membership growth in the Marketplace business due to strong product positioning and overall market growth, partially offset by lower Medicaid membership primarily due to redeterminations and recent divestitures in the Other segment.

The Health benefits ratio (HBR) reached 89.2% for the third quarter, up from 87.0% a year ago, primarily driven by higher acuity in Medicaid resulting from the redetermination process Medicare Star rating impacts.

“Our diversified portfolio has allowed us to successfully navigate a dynamic landscape in the quarter. At the same time, we delivered on fundamentals that carry positive implications for Centene’s multi-year earnings trajectory, including notable RFP wins, Medicare Stars improvements, and ongoing operational efficiencies,” said Centene CEO Sarah London.

“We remain confident in our full-year outlook for adjusted diluted EPS of greater than $6.80 and are well positioned to capture the powerful, long-term growth opportunities we see in government-sponsored healthcare.”

Centene said total managed care membership increased 2.4% to 28.64 million at the end of the third quarter, compared to 27.97 million a year ago.

Centene’s enrollment in its “commercial marketplace” business grew to 4.50 million members from 3.68 million a year ago. Total Medicaid memberships fell 14.2% to 13.07 million.

Guidance: Centene reaffirms the 2024 adjusted EPS guidance floor of over $6.80 versus a consensus of $6.82.

The company’s revenue guidance has been updated to $159 billion—$161 billion, compared to the prior guidance of $155.0 billion—$157.0 billion and the consensus of $155.625 billion.

The 2024 HBR is expected to be around 88.3%-88.5%, compared to the high end of the previous guidance range, approximately 87.9%.

Centene increased its 2024 Premium and service revenues guidance range to $143.5 billion—$144.5 billion, compared to its prior guidance of $141 billion—$143 billion.

Price Action: CNC stock is up 13.6% at $70.02 during the premarket session at last check Friday.

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