On July 26, 2024, Centene Corp (CNC, Financial) released its 8-K filing reporting robust financial results for the second quarter of 2024. Centene, a managed-care organization focused on government-sponsored healthcare plans, including Medicaid, Medicare, and the individual exchanges, served 24 million medical members as of June 2023.
Performance Highlights
Centene Corp (CNC, Financial) reported a diluted EPS of $2.16 and an adjusted diluted EPS of $2.42 for Q2 2024, significantly surpassing the analyst estimate of $2.10. This represents a 15% increase from the $2.10 adjusted diluted EPS reported in the same quarter of 2023. The company also reaffirmed its 2024 adjusted diluted EPS guidance floor of greater than $6.80.
Revenue and Membership Growth
Centene's total revenues for the quarter reached $39.8 billion, with premium and service revenues amounting to $36.0 billion. This growth was primarily driven by a 34% increase in Marketplace membership compared to Q2 2023, reflecting strong product positioning and market growth.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues (in millions) | $39,836 | $34,838 |
| Premium and Service Revenues (in millions) | $35,973 | $34,838 |
| Health Benefits Ratio | 87.6% | 87.0% |
| SG&A Expense Ratio | 8.0% | 8.7% |
| Adjusted SG&A Expense Ratio | 8.0% | 8.6% |
| GAAP Diluted EPS | $2.16 | $1.92 |
| Adjusted Diluted EPS | $2.42 | $2.10 |
| Total Cash Flow Provided by Operations (in millions) | $2,175 | Not Provided |
Operational and Strategic Developments
Centene's CEO, Sarah M. London, commented on the company's performance:
While we have work to do in Medicaid as redeterminations wind down, the overall performance of the diversified portfolio enables us to remain on track for 2024 adjusted diluted EPS guidance. At the same time, we continue to make important progress on operations and quality that positions us well to serve our members and deliver long-term profitable growth."
In addition to financial performance, Centene announced several strategic developments, including a definitive agreement to sell Collaborative Health Systems to Astrana Health, Inc., expected to close by the end of 2024. Furthermore, Centene's Kansas subsidiary, Sunflower Health Plan, was selected to continue providing managed healthcare services through KanCare, with a new contract starting January 1, 2025.
Balance Sheet and Cash Flow
As of June 30, 2024, Centene had cash, investments, and restricted deposits totaling $38.5 billion. The company maintained $217 million in cash and cash equivalents in its unregulated entities. Medical claims liabilities were $18.2 billion, with days in claims payable increasing to 54 days. Total debt stood at $17.6 billion, with no borrowings on the $2.0 billion Revolving Credit Facility at quarter-end. During Q2 2024, Centene repurchased 10.7 million shares for $800 million, leaving $4.4 billion available under the stock repurchase program.
Outlook
Centene reaffirmed its 2024 GAAP diluted EPS guidance floor of greater than $5.94 and adjusted diluted EPS guidance floor of greater than $6.80. The company also increased its 2024 premium and service revenues guidance range by $5.0 billion, reflecting additional revenue from Commercial, Medicare, and Medicaid segments. Total revenue guidance was updated to $155.0 billion to $157.0 billion, with the 2024 HBR expected to be approximately 87.9%.
For more detailed information, please refer to Centene Corp (CNC, Financial)'s 8-K filing.
Explore the complete 8-K earnings release (here) from Centene Corp for further details.
