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What's in the Cards for Centene's (CNC) Q2 Earnings?

Centene Corporation CNC will release second-quarter 2020 results on Jul 28, before the market opens.

Let’s see how things are shaping up for this health insurer prior to this announcement.

For the to-be reported quarter, the company is likely to have gained from solid revenues. Centene is expected to have witnessed membership growth on the back of state suspending eligibility redeterminations and special enrollment periods for Marketplace businesses in a few states.

The company’s revenues might have increased owing to the WellCare buyout as well as solid membership.

However, the company might have taken a hit from a drab performance by its dental and optical business.

On its last earnings call, management had announced that it expects to witness an impact from the cost waivers for COVID-19-related testing and treatment on the second quarter.

The Zacks Consensus Estimate for second-quarter bottom line is pegged at $2.41, indicating a jump of 79.9% from the year-ago reported figure.

Organic growth, strong Medicaid business, favorable product mix and addition of members via expansion and new programs are likely to have contributed to overall growth.

The consensus mark for the company’s revenues suggests an upside of 50.1% from the year-earlier reported number. Other factors, such as improved premiums and higher membership might have also supported its top line.

The Zacks Consensus Estimate for the company’s premiums indicates a hike of 49.2% from the prior-year reported number.

The consensus estimate for total membership by business line implies a surge of 63.5% from the year-ago reported figure.

What the Quantitative Model States

Our proven model predicts an earnings beat for Centene this reporting cycle. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Centene has an Earnings ESP of +0.88%. This is because the Most Accurate Estimate is pegged at $2.44, higher than the Zacks Consensus Estimate of $2.41. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Centene Corporation Price and EPS Surprise

Centene Corporation Price and EPS Surprise

Centene Corporation price-eps-surprise | Centene Corporation Quote

Zacks Rank: Centene currently carries a Zacks Rank #3, which increases the predictive power of ESP.

Highlights of Q1 Earnings and Surprise History

Centene reported first-quarter 2020 adjusted earnings per share of 86 cents, missing the Zacks Consensus Estimate by 14.9% due to lower investment income and incremental senior note interest expense. The bottom line also tumbled 38.1% year over year.

The company delivered a positive surprise in two of the trailing four quarters, missing estimates in the other two. The average negative surprise is 1.9%.

Other Stocks to Consider

Some other stocks worth considering from the medical sector with the perfect mix of elements to also surpass estimates in the next releases are as follows:

Tenet Healthcare Corporation THC has an Earnings ESP of +8.08% and a Zacks Rank of 3, currently. The company is scheduled to release second-quarter earnings on Aug 3.

Anthem, Inc. ANTM is slated to announce second-quarter earnings on Jul 29. The stock has an Earnings ESP of +3.76% and a Zacks Rank #2 at present.

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 +4.04%.

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

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