Centene (CNC) Beats On Q2 Earnings, Revenues Increase Y/Y
Zacks Investment Research | Jul 24, 2017 09:54PM ET
Centene Inc. (NYSE:CNC) reported second-quarter 2017 adjusted net income per share of $1.59, which beat the Zacks Consensus Estimate by 22.3%. Earnings also improved 23.2% year over year, primarily on the back of higher revenues.
Operational Update
For the quarter, total revenue grew 10% to $12 billion year over year, primarily driven by growth in the Health Insurance Marketplace business in 2017 and expansions and new programs in many of the states in 2016 and 2017.This was partially offset by lower membership in the commercial business in California. Revenues also surpassed the Zacks Consensus Estimate of $11.6 billion by 2.6%.
At the end of the quarter, managed care membership of 12.2 million reflected an increase of 7% from the second quarter of 2016.
Health Benefit Ratio (HBR) for the quarter was 86.3% compared with 86.6% in the prior-year quarter. This deterioration of 30 basis points (bps) was due to growth in the Health Insurance Marketplace business, which operates at a lower HBR
In the second quarter, adjusted selling, general and administrative expenses ratio was 9.3%, up 30 bps year over year. This deterioration was due to higher variable compensation expenses based on performance of the business in 2017 and increased business expansion costs. However, this was partially offset by higher Health Net acquisition related expenses in 2016.
Total operating expenses of $11.5 billion increased 9.5% over the prior-year quarter.
Financial Update
As of Jun 30, 2017, Centene had cash and cash equivalents of $4.4 billion, up 12.6% year over year.
Total assets of $21.8 billion grew 8% year over year at the end of the second quarter.
As of Jun 30, 2017, Centene’s long-term debt totaled $4.7 billion, up 1.4% year over year.
At the end of the reported quarter, cash flow used in operations was $306 million. This cash outflow stemmed from to an increase in premium and related receivables of approximately $750 million. This was due to the timing of June-capitation payments from several states.
However, for the first six months of 2017, cash inflow from operations was $942 million against an outflow of $223 million in the prior-year period.
Centene Corporation Price, Consensus and EPS Surprise
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.