CENTENE CORPORATION Reports Record 4Q Earnings for FY2022

Earnings Overview

On February 7 2023, CENTENE CORPORATION ($NYSE:CNC) reported their earnings results for FY2022’s fourth quarter, ending on December 31 2022. The company’s total revenue for the quarter was USD -213.0 million, which was 135.6% lower than that of the same period the previous year. However, net income was reported at USD 35561.0 million, a 9.2% increase from the year prior.

Transcripts Simplified

Centene reported total revenue of $35.6 billion in the fourth quarter of 2022, an increase of 9% compared to the fourth quarter of 2021. Adjusted EPS for the full year was $5.78, beating original guidance by 7% and growing 12% compared to 2021. The consolidated HBR for Q4 was 88.7%, with Medicaid at 89.6% for the full year and Medicare at 86.2%. Commercial HBR was down 550 basis points for the full year. SG&A expense ratio was 9.3% in Q4.

Operating cash flow was -$1.6 billion in the fourth quarter, but cash flow provided by operations was $6.3 billion for the full year. Domestic unregulated and unrestricted cash on hand was $793 million at year-end. Centene repurchased 39.1 million shares of common stock for $3.3 billion from January of 2022 through today, and debt-to-adjusted EBITDA ended at 3.0x. Lastly, days in claims payable was 54 in Q4 of 2022, the same as Q3 of 2022 and up 2 days from Q4 of 2021.

About the Company

Income Snapshot

Below shows the total revenue, net income and net margin for Centene Corporation. More…

Cash Flow Snapshot

Below shows the cash from operations, investing and financing for Centene Corporation. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for Centene Corporation. More…

Key Ratios Snapshot

Some of the financial key ratios for Centene Corporation are shown below. More…

Share Price

On Tuesday, CENTENE CORPORATION announced its financial results for 4Q of Fiscal Year 2022, which reported a record quarter of earnings. The company’s stock opened at $70.0 and closed at $71.0, registering a 1% increase in the day’s trading. This was primarily driven by an increase in premium revenues, primarily from government-sponsored health plans, as well as increases in Medicaid enrollment and premiums across the company’s markets.

Further, the expenses incurred by CENTENE for the quarter were also lower than expected, aided by effective cost management and higher Medicare Advantage membership reimbursements. This will bring in renewed investor confidence in the company and incentivize further business growth. Live Quote…

Analysis

At GoodWhale, we have conducted an analysis of CENTENE CORPORATION‘s fundamentals. Based on our Risk Rating, we have determined that CENTENE CORPORATION is a high risk investment in terms of financial and business aspects. Upon further inspection, we discovered two risk warnings in their income sheet and balance sheet. If you would like to learn more, register with us and take advantage of our comprehensive evaluations! More…

Peers

In the world of health insurance providers, Centene Corp faces some stiff competition. Some of its main competitors are UnitedHealth Group Inc, Pacific Health Care Organization Inc, and Humana Inc. All of these companies are vying for a piece of the pie in the ever-growing health insurance market.

– UnitedHealth Group Inc ($NYSE:UNH)

UnitedHealth Group Inc is an American for-profit managed health care company based in Minnetonka, Minnesota. It offers health care products and services through its subsidiaries, UnitedHealthcare and Optum. As of 2022, it has a market cap of 486.7B and a ROE of 21.75%.

The company’s main business is UnitedHealthcare, which provides health care coverage and benefits services to individuals, families, and businesses through plans sold by state and federal governments, employers, and directly to consumers through the Health Insurance Marketplace. Optum is the company’s health services business, which provides technology and information-enabled health services, including provider network management, care management, clinical decision support, and consumer engagement.

– Pacific Health Care Organization Inc ($OTCPK:PFHO)

As of 2022, Pacific Health Care Organization Inc has a market cap of 10.11M. The company has a return on equity of 1.33%. Pacific Health Care Organization Inc is a healthcare organization that provides services to patients in the Pacific region. The company offers a wide range of services, including primary care, mental health, and substance abuse services. The company also operates a network of clinics and hospitals in the Pacific region.

– Humana Inc ($NYSE:HUM)

Humana Inc. is a for-profit American health insurance company based in Louisville, Kentucky. As of 2019, Humana has had over 13 million customers in the United States. The company offers health, dental, and vision insurance plans, as well as Medicare and Medicaid plans. Humana also offers a wide range of supplemental plans, such as life insurance, long-term care insurance, and pet insurance.

Summary

Centene Corporation recently reported their fourth quarter earnings for 2022, showing a decrease in total revenue of 135.6% compared to the same period last year.

However, net income increased 9.2% over the same period of time. Investors should take note of this large rate of decline in revenue, and carefully consider if this is a sign of further decline in performance. They should also consider the increase in income, and investigate if this is related to cost-cutting measures or if there is underlying strength and growth in the company’s operations. Further analysis of Centene’s financial and operational performance is recommended before investing.