Centene Corporation Surpasses Expectations with Strong Q3 Earnings: Revenue, Membership, and Guidance Up

Centene Corporation (CNC) Exceeds Expectations with Robust Q3 Earnings

Centene Corporation, a leading managed healthcare company, has announced strong third-quarter results that surpassed analyst expectations. Revenue for the quarter reached $42.02 billion, marking a 10.5% year-over-year increase and beating the consensus estimate of $37.69 billion. The company also reported an adjusted EPS of $1.62, exceeding the consensus expectation of $1.38.

This impressive performance was driven by a number of key factors, including:

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Growth in the Commercial Marketplace:

Centene’s commercial marketplace business saw significant growth, with membership rising to 4.50 million from 3.68 million a year ago. This expansion was attributed to strong product positioning and overall market growth.
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Medicaid Rate Increases:

Increased Medicaid rates contributed to the revenue growth. However, total Medicaid memberships declined by 14.2% to 13.07 million due to redeterminations and divestitures in the Other segment.
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Operational Efficiencies:

Centene’s commitment to operational efficiencies played a crucial role in its success.

Positive Outlook for the Future

Centene’s CEO, Sarah London, highlighted the company’s diversified portfolio and its ability to navigate a dynamic landscape. She emphasized that the company’s strong fundamentals, including notable RFP wins, Medicare Stars improvements, and ongoing operational efficiencies, position Centene for a positive multi-year earnings trajectory. London expressed confidence in achieving the full-year outlook for adjusted diluted EPS of greater than $6.80 and emphasized the company’s preparedness to capitalize on long-term growth opportunities in government-sponsored healthcare.

Updated Guidance

Reflecting its strong performance, Centene has reaffirmed its 2024 adjusted EPS guidance floor of over $6.80, aligning with the consensus estimate of $6.82. The company also increased its revenue guidance to a range of $159 billion to $161 billion, exceeding its previous guidance of $155.0 billion to $157.0 billion. The 2024 HBR is expected to be around 88.3%-88.5%, compared to the high end of the previous guidance range, approximately 87.9%. Centene also raised its 2024 Premium and service revenues guidance range to $143.5 billion—$144.5 billion, compared to its prior guidance of $141 billion—$143 billion.

Positive Market Response

Centene’s strong earnings announcement has been well-received by the market. CNC stock is up 13.6% at $70.02 during the premarket session, reflecting investor confidence in the company’s future prospects.