Markets

Centene's (CNC) Q2 Earnings Miss Estimates, Revenues Beat

Centene Corporation CNC reported second-quarter 2020 adjusted earnings per share of $2.40, missing the Zacks Consensus Estimate of $2.41 by 0.4%. However, the bottom line soared 79.1% year over year on the back of solid revenues.

For the second quarter, total revenues surged 51% to $27.7 billion from the year-ago period, primarily aided by the WellCare buyout, growth in Health Insurance Marketplace business, expansions and new programs across many states in 2019 and 2020 as well as the reinstatement of the health insurer fee in 2020. However, this upside was offset by the Illinois health plan divestiture.

Meanwhile, the top line surpassed the consensus mark by 1.2%.

Quarterly Operational Update

As of Jun 30, 2020, managed care membership came in at 24.6 million, up 64% year over year.

Health Benefit Ratio (HBR) for the reported quarter was 82.1% compared with 86.7% in the prior-year period. This decrease can be attributed to the current COVID-19 pandemic.

Adjusted Selling, General & Administrative (SG&A) expense ratio was 8.5% for the quarter compared with 9% for the same period last year.

This year-over-year contraction of 50 basis points can be attributed to the WellCare buyout, and leveraging of costs over higher revenues.

Centene Corporation Price, Consensus and EPS Surprise

Centene Corporation Price, Consensus and EPS Surprise

Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote

Financial Update

As of Jun 30, 2020, the company's cash and cash equivalents totaled $12.8 billion, up 5.6% from the figure at 2019 end.

As of Jun 30, 2020, total assets were up 66.7% to $68.3 billion from the level at 2019 end.

Centene’s long-term debt summed $16.7 billion, up 22.5% from the figure at 2019 end.

Net cash provided by operating activities as of Jun 30, 2020 was $3.4 billion compared with net cash provided by operating activities of $2.3 billion a year ago.

2020 Outlook

The company now expects revenues in the range of $109-$111.4 billion, lowered from the previous anticipation of $110-$112.4 billion.

Adjusted EPS is anticipated between $4.76 and $4.96, up from the previous projection of $4.56-$4.76 per share.

Zacks Rank

Centene carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Upcoming Releases From Medical Sector

Some stocks worth considering from the medical sector with a perfect mix of elements to surpass estimates in the upcoming quarterly releases are as follows:

Tenet Healthcare Corporation THC has an Earnings ESP of +7.87% and a Zacks Rank of 3, currently. The company is scheduled to release second-quarter earnings on Aug 3.

Molina Healthcare, Inc. MOH is set to report second-quarter earnings on Jul 30. The stock is currently a #2 Ranked player and has an Earnings ESP of +4.08%.

bluebird bio, Inc. BLUE is set to report second-quarter earnings on Aug 6. The stock presently has a Zacks Rank #3 and an Earnings ESP of +69.18%.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>

 


Click to get this free report

Molina Healthcare, Inc (MOH): Free Stock Analysis Report

Tenet Healthcare Corporation (THC): Free Stock Analysis Report

Centene Corporation (CNC): Free Stock Analysis Report

bluebird bio, Inc. (BLUE): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More