Unlike other healthcare companies, the St. Louis-based insurer has raised its revenue guidance.
Centene Corp. reported total revenues of more than $26 billion during Q1 2020, as the company anticipates a "choppy" economic recovery from the coronavirus disease 2019 (COVID-19) pandemic.
The St. Louis-based insurer added nearly 9 million members year-over-year, supported largely by its $17.3 billion acquisition of WellCare Health Plans, which closed in January.
Similarly, Centene's four revenue segments all produced significant growth in Q1, led by Medicare, which rose 118% year-over-year.
Unlike other healthcare companies that have withdrawn full year guidance due to the financial uncertainties created by the coronavirus outbreak, Centene has raised its total revenue guidance to a range of $110 billion to $112.4 billion.
"We all recognize the unprecedented nature of the COVID-19 pandemic and the significant impact from both a health and economic perspective. This is not a business as usual environment and economic recovery will be choppy. In this challenging landscape that we all face, Centene has the team, systems, expertise and financial strength to rise to the occasion," Michael Neidorff, CEO of Centene, said in a statement. "We are confident in our approach to navigate the crisis while executing on our priorities and remain highly committed to meeting the needs of our members, providers and our state customers."
While the company's Q1 earnings remained largely unscathed from the spread of the virus, Centene did cite the "disruption and volatility in the global capital markets" as its motivation to defer redemption of $1 billion of its 4.75% Senior Notes due 2022.
In its press release announcing its Q1 earnings, Centene detailed its response to the pandemic, including the decision to waive prior authorization for COVID-19 screening, testing, and treatment.
“Centene’s first quarter results were not materially impacted by coronavirus and management maintained its annual earnings guidance, emphasizing the pandemic and economic conditions have created tremendous uncertainty," Dean Ungar, vice president of Moody's Investors Service, said in a statement. "Leverage remains high as the company has chosen to maintain higher levels of cash rather than make a planned early debt repayment. The health insurer’s core EBITDA of $935 million was down 2% year-over-year in the first quarter, despite closing on the WellCare acquisition in January, reflecting higher medical costs and an adverse impact from coronavirus-related market turmoil on the investment portfolio.”
As for its financial performance during the quarter, Centene produced an adjusted diluted earnings per share of $0.86 and adjusted net earnings of $476 million, which were both year-over-year declines.
Centene also reported a negative cash flow of $240 million for the quarter as a result of premium payments totaling $700 million from New York and the growth of the company's Medicare Prescription Drug Plan.
For complete financial information, review Centene's filing with the Securities and Exchange Commission.
Editor's note: This story has been updated to include commentary from Moody's Investors Service.
Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.
Photo credit: KIEV, UKRAINE - Dec 11, 2018: Centene Corporation Insurance company logo seen displayed on smart phone. - Image / Editorial credit: IgorGolovniov / Shutterstock.com