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Dec 31, 2022
Centene Q4 2022 Earnings Report
Centene reported mixed results with revenue increase offset by a net loss, driven by divestiture-related charges and impairments. The company focused on portfolio optimization and capital deployment through share repurchases.
Key Takeaways
Centene Corporation reported a 9% increase in total revenues for Q4 2022, reaching $35.6 billion, driven by Medicaid and Medicare growth, and the acquisition of Magellan. However, the company experienced a GAAP diluted loss per share of $(0.38), while adjusted diluted EPS was $0.86. The company executed $1.4 billion in share repurchases during the quarter and increased its 2023 premium and service revenues guidance by $2.0 billion.
Total revenues increased by 9% to $35.6 billion, driven by Medicaid and Medicare growth and the Magellan acquisition.
GAAP diluted loss per share was $(0.38), while adjusted diluted EPS was $0.86.
The company completed five divestitures in the past three months: Magellan Rx, Magellan Specialty Health, Ribera Salud, Centurion, and HealthSmart.
Centene executed $1.4 billion of share repurchases in Q4 and increased its 2023 premium and service revenues guidance by $2.0 billion.
Revenue by Segment
Forward Guidance
Centene is increasing its 2023 premium and service revenues guidance range by $2.0 billion and reiterates its 2023 adjusted diluted EPS guidance of $6.25 to $6.40.
Positive Outlook
- An additional $1.5 billion of Medicaid premium revenue reflecting a higher starting point in 2023 and an additional two months until redeterminations recommence on April 1, 2023.
- An additional $3.0 billion of Commercial premium revenue from a stronger than expected Marketplace open enrollment.
- The company reiterates its 2023 adjusted diluted EPS guidance of $6.25 to $6.40.
Challenges Ahead
- Lower Medicare revenue of $500 million reflecting softer than expected 2023 annual enrollment.
- Decreased revenues of $2.0 billion reflecting the divestitures of Magellan Specialty Health, Centurion, and HealthSmart, which were completed in January 2023 and were previously included in our 2023 guidance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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