NYSE$CNC

Centene Corp · Q2 2023 earnings

Q2 2023 earnings · · Investor relations

Briefing

Centene reported strong second quarter performance, driven by new business wins, Marketplace membership growth and continued advancement of the Value Creation Plan. The company increased its full year 2023 adjusted diluted EPS guidance.

Centene Corporation announced its financial results for the second quarter ended June 30, 2023. The company reported adjusted diluted EPS of $2.10, up over 18% from the second quarter of 2022. Premium and service revenues were $34.8 billion. Centene increased its 2023 full year adjusted diluted EPS guidance by $0.05 to at least $6.45.

  • Adjusted diluted EPS of $2.10, up over 18% from $1.77 in the second quarter of 2022.
  • Premium and service revenues of $34.8 billion in the second quarter of 2023.
  • Medicaid redeterminations progressing as expected.
  • Increased 2023 full year adjusted diluted EPS guidance by $0.05 to at least $6.45; reiterates 2024 adjusted diluted EPS floor of greater than $6.60.

Headline financials

Total Revenue

$37.6B

Previous: $35.9B+4.7%
EPS (adj)

$2.10

Previous: $1.77+18.6%
SG&A expense ratio

8.7%

Previous: 8.2%+6.1%
Adjusted SG&A ratio

8.6%

Previous: 8.2%+4.9%
Days in claims payable

52

No prior period
Capital Expenditures

-$440M

Previous: -$524M+16.0%
Free Cash Flow

$618M

Previous: -$696M+188.8%
Net Income

$1.06B

Previous: -$172M+715.1%
Operating Income

$1.17B

Previous: -$129M+1007.8%
Gross Profit

$4.61B

Previous: $33.8B-86.4%
Cash & Equivalents

$17.2B

Previous: $13.4B+27.8%
Total Assets

$82.9B

Previous: $81.1B+2.2%
Stock-Based Comp

$56M

Previous: $59M-5.1%

Revenue & EPS history

Centene · Revenue · Quarterly

$37.6B

Q2 2023+4.7%vs Q2 2022
Beat estimate in 14 of 15 quarters(93%)
ActualEstimate

Revenue by segment

Centene · $34.8B total across 4 segments · Q2 2023

  • Medicaid
    $21.9B-2.5%
  • Commercial
    $5.73B+25.9%
  • Medicare
    $5.67B+0.5%
  • Other
    $1.54B-53.0%

Forward guidance

The Company is increasing its 2023 premium and services revenues guidance range by $1.8 billion to reflect an additional $1.0 billion of Medicaid and Commercial premiums as well as $800 million for Medicaid state-directed payments. The Company is also increasing its 2023 adjusted diluted EPS guidance by $0.05 to at least $6.45.

Tailwinds

  • Total revenues (in billions) $147.3 - $149.3
  • Premium and service revenues (in billions) $137.0 - $139.0
  • HBR 87.1% - 87.7%
  • SG&A expense ratio 8.8% - 9.2%
  • Adjusted SG&A expense ratio 8.7% - 9.1%

Headwinds

  • Effective tax rate 22.5% - 23.5%
  • Adjusted effective tax rate 24.1% - 25.1%
  • Diluted shares outstanding (in millions) 546.6 - 549.6
  • GAAP diluted EPS at least $5.60
  • Adjusted diluted EPS at least $6.45

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 Q2 2023

Historical avgQ2 2023

+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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