Centene Beats First-Quarter EPS Projection, but Predicts 2024 Medicare Loss

Centene Corp. exceeded earnings projections during the first quarter of 2023 and raised its guidance, moves that were made possible by growth in Affordable Care Act exchange enrollment. But the carrier cut its guidance for 2024, mainly due to capital costs related to scaling up its Medicare Advantage business. One Wall Street analyst was sanguine on the results and praised the firm’s “conservatism” in approaching Medicaid redeterminations, which will have a disproportionate impact on the Medicaid-focused insurer compared to other commercial insurance peers. 

Centene took in $35 billion in revenues during the first quarter of 2023, and delivered $1.16 billion in adjusted net earnings, which amounted to adjusted diluted earnings per share (EPS) of $2.11, a figure that beat the Wall Street consensus projection of $1.98. Total quarterly premium and operating revenues increased by 2% year over year, while adjusted quarterly net earnings increased by 8.2% year over year. Medical loss ratio (MLR) was 87%, down from 87.3% in the first quarter of 2022. Management reduced its 2024 full-year EPS projection to $6.60 or higher.