Centene Corporation CNC reported fourth-quarter 2024 adjusted earnings per share (EPS) of 80 cents, which outpaced the Zacks Consensus Estimate by 63.3%. Moreover, the bottom line rose 77.8% year over year.

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Revenues were $40.8 billion, which increased 3.4% year over year. The top line surpassed the consensus mark by 4.8%.

The quarterly performance benefited from strong Commercial revenue growth, Medicaid rate increases and expansion of the Marketplace business. However, the upside was partly offset by elevated operating expenses, a decline in Medicaid and Medicare membership and a deteriorating Health Benefits Ratio (HBR).

Centene Corporation Price, Consensus and EPS Surprise

Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote

Quarterly Operational Update of CNC

Revenues from Medicaid dipped 1% year over year to $20.8 billion, while Medicare revenues grew 4% year over year to $5.5 billion. Additionally, commercial revenues of $8.7 billion climbed 18% year over year.

Centene's premiums amounted to $35.5 billion, rising 3.8% year over year due to Medicaid rate increases and higher membership in the Marketplace business, supported by strong product positioning and overall market expansion. The metric beat the Zacks Consensus Estimate of $34.7 billion and our estimate of $34.5 billion.  

Service revenues decreased 29.7% year over year to $777 million, lower than the consensus mark of $782.2 million and our estimate of $783.1 million. Investment and other income of $344 million dipped 14.2% year over year, missing the consensus mark of $396.8 million and falling short of our estimate of $378.7 million.

As of Dec. 31, 2024, total membership was 28.6 million, which grew 4.1% year over year and beat the Zacks Consensus Estimate and our estimate by a whisker. Membership in the Commercial Marketplace business witnessed a significant year-over-year increase, partly offset by declines in the Medicaid and Medicare businesses. 

Centene’s HBR deteriorated 10 basis points year over year to 89.6%.

Adjusted net earnings of $404 million rose 68.3% year over year. 

Total operating expenses increased 2.5% year over year to $40.6 billion, surpassing our estimate of $38.3 billion. The uptick was mainly due to higher medical costs and premium tax expenses, which rose 3.8% and 9.1%, respectively, on a year-over-year basis.

Adjusted SG&A expense ratio of 8.9% improved 80 basis points year over year, attributable to the divestiture of Circle Health Group, which had a higher SG&A expense ratio, along with ongoing leveraging of costs over increased revenues and lower Medicare SG&A.

CNC’s Financial Update (As of Dec. 31, 2024)

Centene exited the fourth quarter with cash and cash equivalents of $14.1 billion, which declined 18.2% from the 2023-end level. 

Total assets of $82.4 billion slipped 2.6% from the figure at 2023-end.

Long-term debt amounted to $18.4 billion, up 4% from the figure as of Dec. 31, 2023. The current portion of long-term debt totaled $110 million.

Total stockholders’ equity of $26.5 billion rose 2.2% from the 2023-end figure.

Centene generated $154 million of net cash from operations in 2024, which declined significantly from the prior-year period.

Full-Year Update

Total revenues of $163.1 billion jumped 5.9% from 2023 levels, while adjusted EPS of $7.17 rose 7.3% year over year. Total operating expenses rose 5.8% in 2024 to $159.9 billion.

Centene’s Share Repurchase Update

Centene bought back common shares worth $3 billion in 2024. A leftover capacity of $2.2 billion remained under the company’s share repurchase authorization as of Feb. 4, 2025.

CNC’s 2025 Guidance

Management projects premium and service revenues of $158-$160 billion. The midpoint of the updated outlook indicates growth of 9.3% from the 2024 figure.  

Adjusted EPS is expected to be greater than $7.25, which indicates a 1.1% rise from the 2024 reported figure. GAAP EPS is expected to remain greater than $6.19.

CNC’s Zacks Rank

Centene currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Medical Sector Releases

Of the Medical sector players that have reported fourth-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated UNH, Elevance Health, Inc. ELV and HCA Healthcare, Inc. HCA beat the respective Zacks Consensus Estimate.

UnitedHealth Group reported fourth-quarter 2024 adjusted EPS of $6.81, which surpassed the Zacks Consensus Estimate of $6.71. The bottom line advanced 10.6% year over year. Revenues rose 6.8% year over year to $100.8 billion. However, the top line missed the consensus mark by 1.4%. UnitedHealth’s MCR was 85.5% in 2024, which deteriorated from 83.2% in 2023. 

UnitedHealth’s operating earnings grew 1.1% year over year to $7.8 billion in the fourth quarter. However, the net margin deteriorated 30 bps year over year to 5.5%. Revenues from the health benefits business of UnitedHealth, UnitedHealthcare, rose 4.7% year over year to $74.1 billion. Earnings from operations amounted to $3 billion in the fourth quarter, down from $3.1 billion a year ago. The UnitedHealthcare business catered to 50.68 million people as of Dec. 31, 2024, which fell 3.9% year over year. 

Elevance Health’s fourth-quarter 2024 adjusted EPS of $3.84 surpassed the Zacks Consensus Estimate by 1.1%. However, the bottom line deteriorated 31.7% year over year. Operating revenues of $45 billion rose 6% year over year. Moreover, the top line beat the consensus mark by a whisker. Medical membership of Elevance Health was around 45.7 million as of Dec. 31, 2024, which slipped 2% year over year. 

Premiums increased 3.2% year over year to $36.2 billion. Product revenues of $6.7 billion increased 24.5% year over year. Net investment income declined 0.4% year over year to $527 million. The Health Benefits unit’s operating revenues totaled $37.6 billion, which increased 3% year over year. Operating gain declined 75% year over year to $0.2 billion. The Carelon segment’s operating revenues amounted to $14.7 billion, which rose 19% year over year. 

HCA Healthcare, Inc. reported fourth-quarter 2024 adjusted EPS of $6.22, which outpaced the Zacks Consensus Estimate by 4.2%. The bottom line advanced 5.4% year over year. Revenues rose 5.7% year over year to $18.3 billion. The top line beat the consensus mark by 1.1%. Same-facility equivalent admissions improved 3.1% year over year in the fourth quarter, while same-facility admissions advanced 3% year over year. 

Same-facility revenue per equivalent admission grew 2.9% year over year. Same-facility inpatient surgeries increased 2.8% year over year. Same-facility outpatient surgeries dipped 1.3% year over year. Additionally, same-facility emergency room visits rose 2.4% year over year in the fourth quarter. Adjusted EBITDA of $3.7 billion improved 2.6% year over year. HCA Healthcare operated 190 hospitals and roughly 2,400 ambulatory sites of care across 20 states and the United Kingdom as of Dec. 31, 2024.

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