ST. LOUIS - Centene Corporation (NYSE: NYSE:CNC) reported a significant beat on both earnings and revenue for the second quarter of 2024, with adjusted diluted earnings per share (EPS) of $2.42, surpassing analyst expectations of $1.96 by $0.46. CNC shares were up 3.4% following the report.
The healthcare enterprise also announced revenues of $39.84 billion, which outperformed the consensus estimate of $36.59 billion.
The company's robust guidance for the fiscal year 2024 has contributed to the positive market response. Centene forecasts an adjusted diluted EPS of $6.80, which, while slightly below the analyst consensus of $6.83, did not dampen investor sentiment. Furthermore, the company's revenue projection for FY2024 stands between $155-157 billion, notably higher than the consensus estimate of $150.4 billion.
In the second quarter, Centene's adjusted diluted EPS rose 15% from the $2.10 reported in the same period last year, signaling strong profitability growth. Membership in the Marketplace increased by 34% compared to the second quarter of 2023, contributing to the company's top-line growth. The health benefits ratio (HBR) for the quarter was 87.6%, a slight uptick from 87.0% in the previous year, attributed to higher acuity in Medicaid and Medicare Star rating impacts. However, this was partially offset by the growth in Marketplace membership and improved margin through strong product design and execution.
Centene's CEO, Sarah M. London, acknowledged the work to be done in Medicaid as redeterminations wind down but expressed confidence in the diversified portfolio's ability to keep the company on track for its 2024 adjusted diluted EPS guidance. She also highlighted the progress on operations and quality, positioning the company to serve its members effectively and deliver long-term profitable growth.
The company's financial strength was further underscored by a cash flow from operations of $2.2 billion for the quarter, primarily driven by net earnings and risk adjustment accruals for the 2024 benefit year. As of June 30, 2024, Centene had cash, investments, and restricted deposits totaling $38.5 billion, with $217 million in unregulated entities.
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