NYSE$CNC

Centene Corp · Q1 2020 earnings

Q1 2020 earnings · · Investor relations

Briefing

Centene reported first quarter 2020 results with diluted EPS of $0.08 and Adjusted Diluted EPS of $0.86.

Centene Corporation reported a 41% increase in total revenues, reaching $26.0 billion, driven by the acquisition of WellCare, growth in the Health Insurance Marketplace, and expansions in various states. Diluted EPS was $0.08, and Adjusted Diluted EPS was $0.86, with both figures negatively impacted by lower investment income and incremental senior note interest expense.

  • Centene acquired WellCare Health Plans, Inc., valued at approximately $19.6 billion.
  • Managed care membership reached 23.8 million, a 61% increase year-over-year.
  • Total revenues grew by 41% to $26.0 billion compared to Q1 2019.
  • The company repurchased 9 million shares of Centene common stock for $500 million.

Headline financials

Total Revenue

$26B

Previous: $18.4B+41.1%
EPS (adj)

$0.86

Previous: $1.39-38.1%
SG&A expense ratio

9.9%

Previous: 9.6%+3.1%
Adjusted SG&A ratio

8.6%

Previous: 9.5%-9.5%
Days in claims payable

51

No prior period
Capital Expenditures

-$177M

Previous: -$176M-0.6%
Free Cash Flow

-$131M

Previous: $346M-137.9%
Net Income

$46M

Previous: $522M-91.2%
Operating Income

$188M

Previous: $685M-72.6%
Gross Profit

$25.2B

Previous: $17.9B+40.8%
Cash & Equivalents

$9.31B

Previous: $6.35B+46.7%
Total Assets

$66.4B

Previous: $33.6B+97.9%
Stock-Based Comp

$117M

Previous: $38M+207.9%

Revenue & EPS history

Centene · Revenue · Quarterly

$26B

Q1 2020+41.1%vs Q1 2019
Beat estimate in 14 of 16 quarters(88%)
ActualEstimate

Revenue by segment

Centene · $25.4B total across 4 segments · Q1 2020

  • Medicaid
    $17B+35.2%
  • Commercial
    $4.12B+13.0%
  • Medicare
    $3.02B+118.2%
  • Other
    $1.25B+54.4%

Forward guidance

The Company's annual guidance for 2020 is as follows:

Tailwinds

  • Total revenues are expected to be between $110.0 billion and $112.4 billion.
  • GAAP diluted EPS is projected to be between $2.89 and $3.03.
  • Adjusted Diluted EPS is anticipated to be between $4.56 and $4.76.
  • Revenue growth
  • Avoided / delayed costs

Headwinds

  • COVID-19 costs
  • Risk adjustment initiatives
  • Delay in WellCare synergies
  • Lower investment income
  • Higher interest expense

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q1 2020

Historical avgQ1 2020

+0.4%

Avg return

Earnings day

+0.4%

Avg return

5 days after

+1.9%

Avg return

30 days after

54%

37 / 68 earnings

Positive

+13.8%

Q1 2014

Best reaction

-10.4%

Q2 2016

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+0.5%+22.6%+33.9%
Q4 2025-3.7%+1.3%+9.3%
Q3 2025+12.5%+3.9%+18.5%
Q1 2025-6.3%-2.8%-8.4%
Q4 2024-5.4%-9.1%-8.3%
Q3 2024+0.0%+0.3%-2.0%
Q2 2024+9.0%+14.1%+16.5%
Q1 2024-2.4%-4.5%-1.4%
Q4 2023+1.1%+4.4%+7.5%
Q3 2023-3.0%-4.8%+4.7%
Q2 2023-2.7%-3.7%-9.2%
Q1 2023-1.5%+1.9%-6.3%
Q4 2022+2.7%+2.4%-7.7%
Q3 2022+11.9%+13.2%+10.3%
Q2 2022+0.6%+1.1%+4.1%
Q1 2022-4.9%-5.1%-3.5%
Q4 2021+6.4%+3.1%+4.5%
Q3 2021+3.8%+4.8%+11.2%
Q2 2021-4.0%-5.6%-12.5%
Q1 2021-9.9%-6.5%+11.7%
Q4 2020+4.8%+1.6%+6.3%
Q3 2020-7.9%-11.0%-6.3%
Q2 2020-1.4%-3.0%-10.1%
Q1 2020-6.6%-8.3%-5.5%
Q4 2019+5.1%+0.4%-5.0%
Q3 2019+5.7%+5.4%+30.4%
Q2 2019+3.0%+2.4%-12.7%
Q1 2019+4.4%+9.5%+15.3%
Q4 2018-2.9%-3.2%-13.2%
Q3 2018-8.3%-9.9%-5.5%
Q2 2018-3.1%-3.0%+6.0%
Q1 2018-1.2%-0.4%+5.5%
Q4 2017+5.0%+2.3%+0.9%
Q3 2017-7.4%-3.7%-1.1%
Q2 2017-1.0%-1.8%+2.1%
Q1 2017+1.1%+3.3%+4.5%
Q4 2016+7.9%+9.1%+9.3%
Q3 2016+1.4%+0.1%-10.5%
Q2 2016-10.4%-6.3%-10.0%
Q1 2016+4.2%
Q4 2015+2.2%
Q3 2015+5.3%
Q2 2015+0.2%
Q1 2015-9.7%
Q4 2014+5.6%
Q3 2014+9.3%
Q2 2014+5.8%
Q1 2014+13.8%
Q4 2013+4.5%
Q3 2013-4.1%
Q2 2013+5.1%
Q1 2013+4.4%
Q4 2012+6.1%
Q3 2012+0.3%
Q2 2012+6.9%
Q1 2012-6.0%
Q4 2011-2.5%
Q3 2011+12.6%
Q2 2011+3.3%
Q1 2010+10.9%
Q1 2011+2.4%
Q4 2008-6.5%
Q4 2010-6.5%
Q3 2009-6.6%
Q2 2009-6.6%
Q3 2010-6.6%
Q4 2009-5.3%
Q2 2010-5.3%

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