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MarketScreener Homepage  >  Equities  >  Nyse  >  Centene Corporation    CNC

CENTENE CORPORATION

(CNC)
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Centene : Profit Dented by Higher Costs

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02/04/2020 | 11:48am EDT

By Dave Sebastian and Anna Wilde Mathews

Centene Corp. said its fourth-quarter profit fell as expenses increased, though revenue rose.

A key measure of spending came in worse than analysts expected, pushed up by results in the company's Affordable Care Act exchange business and health-care costs tied to the flu. The medical-loss ratio, which represents the share of premiums paid out in claims, was 88.4%, compared with analysts' projected 87.6%.

Anthem Inc. also missed projections on the ratio in the fourth quarter, and it flagged the same two general causes. Across the industry, the ratios were higher in 2019 due to the suspension of a health-insurance tax.

Centene said during a call with analysts that margins on its exchange business remained in line with its target, and said it expected to maintain that range.

"It's still solidly in the 5 to 10% range," said Chief Executive Michael Neidorff. He also said the company had seen higher costs due to billing issues with some hospitals that weren't in its network, but that it had now signed contracts with them, which should reduce costs in the future.

Centene shares were down 1% Tuesday morning.

The St. Louis-based insurance company posted net income of $209 million, or 49 cents a share, compared with $241 million, or 57 cents a share, in the same period a year prior. Adjusted earnings were 73 cents a share.

Analysts expected earnings of 54 cents a share, or 73 cents a share on an adjusted basis, according to FactSet.

Revenue rose to $18.86 billion from $16.56 billion in the prior year, driven by its health insurance marketplace business and expansions in states such as Arkansas, Illinois, Iowa, New Mexico and Pennsylvania. Analysts were looking for $18.44 billion.

Centene had $18.59 billion in operating expenses for the quarter, compared with $16.17 billion in the year earlier.

The company had 15.24 million members as of Dec. 31, compared with 14.17 million in the prior year.

Centene plans to put out its 2020 guidance on March 3, with a conference call the following day at 8:30 a.m. ET.

Write to Dave Sebastian at dave.sebastian@wsj.com and Anna Wilde Mathews at anna.mathews@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
ANTHEM, INC. 11.03% 225.72 Delayed Quote.-32.69%
CENTENE CORPORATION 10.11% 60.12 Delayed Quote.-13.15%
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Financials (USD)
Sales 2020 104 B
EBIT 2020 4 336 M
Net income 2020 1 955 M
Debt 2020 7 398 M
Yield 2020 -
P/E ratio 2020 16,5x
P/E ratio 2021 12,0x
EV / Sales2020 0,39x
EV / Sales2021 0,33x
Capitalization 33 073 M
Chart CENTENE CORPORATION
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Technical analysis trends CENTENE CORPORATION
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 20
Average target price 78,53  $
Last Close Price 56,36  $
Spread / Highest target 66,8%
Spread / Average Target 39,3%
Spread / Lowest Target 8,23%
EPS Revisions
Managers
NameTitle
Michael F. Neidorff Chairman, President & Chief Executive Officer
Brandy Burkhalter Chief Operating Officer & Executive Vice President
Jeffrey A. Schwaneke Chief Financial Officer, Treasurer & Executive VP
Mary V. Mason Chief Medial Officer & Senior Vice President
Ken Yamaguchi Chief Medical Officer & Executive Vice President
Sector and Competitors
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ANTHEM, INC.-32.69%57 245
HUMANA INC.-20.43%41 490
WELLCARE HEALTH PLANS5.97%17 611