NYSE$CNC

Centene Corp · Q3 2021 earnings

Q3 2021 earnings · · Investor relations

Briefing

Centene's financial results for the third quarter ended September 30, 2021, were reported, with diluted EPS of $0.99 and adjusted diluted EPS of $1.26.

Centene Corporation reported strong third quarter results with total revenues of $32.4 billion, representing 11% growth compared to the third quarter of 2020, and a diluted EPS of $0.99 and adjusted diluted EPS of $1.26.

  • Managed care membership reached 26.5 million, a 5% increase year-over-year.
  • Total revenues grew by 11% to $32.4 billion compared to Q3 2020.
  • The health benefits ratio (HBR) was 88.1% for the third quarter of 2021.
  • Operating cash flow was $1.8 billion, 3.1 times net earnings for Q3 2021.

Headline financials

Total Revenue

$32.4B

Previous: $29.1B+11.4%
EPS (adj)

$1.26

Previous: $1.26+0.0%
SG&A expense ratio

8.8%

Previous: 9.1%-3.3%
Adjusted SG&A ratio

8.6%

Previous: 8.9%-3.4%
Days in claims payable

51

Previous: 52-1.9%
Capital Expenditures

-$662M

Previous: -$663M+0.2%
Free Cash Flow

-$78M

Previous: -$95M+17.9%
Net Income

$584M

Previous: $568M+2.8%
Operating Income

$545M

Previous: $861M-36.7%
Gross Profit

$31.1B

Previous: $28.2B+10.0%
Cash & Equivalents

$13.4B

Previous: $12.2B+10.0%
Total Assets

$77.7B

Previous: $68.4B+13.7%
Stock-Based Comp

$40M

Previous: $54M-25.9%

Revenue & EPS history

Centene · Revenue · Quarterly

$32.4B

Q3 2021+11.4%vs Q3 2020
Beat estimate in 12 of 16 quarters(75%)
ActualEstimate

Revenue by segment

Centene · $32B total across 4 segments · Q3 2021

  • Medicaid
    $21.6B+13.6%
  • Commercial
    $4.38B-5.5%
  • Medicare
    $3.92B+8.8%
  • Other
    $2.08B+68.0%

Forward guidance

The Company's revenue guidance has been increased to reflect the acquisition of Circle Health, which is expected to be neutral to adjusted EPS in the first six months of ownership, and approximately $500 million of additional pass through payments.

Tailwinds

  • Total revenues (in billions) between $125.2 and $126.4
  • GAAP diluted EPS between $1.87 and $1.93
  • Adjusted diluted EPS between $5.05 and $5.15
  • HBR between 87.6% and 88.0%
  • Diluted shares outstanding (in millions) between 589.0 and 592.0

Headwinds

  • SG&A expense ratio between 8.4% and 8.8%
  • Adjusted SG&A expense ratio between 8.2% and 8.6%
  • Effective tax rate between 29.9% and 30.9%
  • Adjusted effective tax rate between 24.6% and 25.6%
  • Acquisition related expenses of $164 million to $179 million are excluded from Adjusted SG&A expense ratio

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 Q3 2021

Historical avgQ3 2021

+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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