Centene Q2 financial report shows increased profits and revenue
“We are pleased with the strong second quarter performance across our product lines,” Michael F. Neidorff, Centene’s Chairman and Chief Executive Officer said. “The Marketplace business continues to be particularly strong, confirming our business as usual approach.”
Centene’s managed care membership increased by 7 percent, up to 12.2 million consumers across 24 states. Centene is one of the nation’s largest insurers on the marketplace, reporting over 1.7 million commercial members in 2017. Centene plans to expand to Kansas, Missouri and Nevada marketplaces in 2018.
Total revenue for Q2 grew by 10 percent to nearly $12 billion. Net earnings for the first six months of 2017 more than doubled from last year to $393 million. Of that, $254 million was earned in Q2.
Other highlights from the report include:
- Health benefits ratio (HBR) of 86.3% for the second quarter of 2017, compared to 86.6% in the second quarter of 2016.
- Selling, general and administrative (SG&A) expense ratio of 9.3% for the second quarter of 2017, compared to 9.2% for the second quarter of 2016.
- Adjusted SG&A expense ratio of 9.3% for the second quarter of 2017, compared to 9.0% for the second quarter of 2016.
- Operating cash flow of $(306) million for the second quarter of 2017 and $942 million for the six months ended June 30, 2017.
- Diluted EPS for the second quarter of 2017 of $1.44, compared to $0.98 for the second quarter of 2016.
- Adjusted Diluted EPS for the second quarter of 2017 of $1.59, compared to $1.29 for the second quarter of 2016.
The better than expected quarter caused Centene to change its full year projections.
Ahead of the Senate motion to begin debate this afternoon, Neidorff started the conference call to review the financial results by saying:
I’d like to begin with comments on the healthcare legislation landscape. It is a moving target with a long way to play out, but you know that. Centene’s priority has always been to ensure this country’s most vulnerable populations have access to high-quality affordable healthcare. We remain committed to working closely with federal and state regulators and policy makers to collaborate on actions needed to stabilize the market.
Whether or not, members of Congress believe a Medicaid design or a commercial design is the best way to deliver high-quality healthcare to low income individuals, Centene is the market leader in both platforms. We have the credibility as well as the experience to work with Congress on ways to address the challenges associated with the current law.