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Facing COVID Headwinds, Centene Total Revenues Jump 51% Year-Over-Year

Analysis  |  By Jack O'Brien  
   July 28, 2020

The company did experience a more than 4% decline in its health benefits ratio, citing "lower medical utilization due to the COVID-19 pandemic."

Centene Corp. reported total revenues of $27.7 billion during Q2 2020, up 51% year-over-year, despite business challenges related to the coronavirus disease 2019 (COVID-19) pandemic.

The St. Louis-based insurer released its latest earnings report Tuesday morning, highlighted by the addition of more than 9.5 million managed care members compared to Q2 2019.

Centene added more than 350,000 dual-eligible members, more than 330,000 health insurance marketplace members, and nearly 700,000 Medicaid expansion members.

The company recorded a GAAP diluted earnings per share (EPS) of $2.05, well above the EPS of $1.18 produced this time last year, and an adjusted EPS of $2.40, exceeding its adjusted EPS of $1.34 in Q2 2019.

However, Centene's total revenue guidance for the rest of 2020 did shrink from a range of $110 billion to $112.4 billion down to a range of $109 billion to $111.4 billion.

C-suite perspective:

"I am pleased with our solid second quarter performance, which came in line with our expectations. Our performance underscores the impact of shelter in place policies on our diversified platform in addition to our team's solid execution in what continues to be a challenging operating landscape," Michael Neidorff, CEO of Centene, said in a statement. "Looking ahead, while we expect the national economic trajectory to remain choppy as we move through the second half of the year, we believe that the return of utilization by our members seeking treatments will be regionally driven. We continue to provide the highest quality of care to our members during this critical time and are well-positioned to respond quickly to evolving dynamics as we execute on our growth strategy. We are further supported by the strength of our balance sheet and solid financial position."

Related: Centene Reports Solid Q1, Prepares for 'Choppy' Economic Recovery From COVID-19

Centene's strongest segment during Q2 was its Medicare division, which produced revenues exceeding $3.5 billion, an increase of 142% year-over-year.

Similarly, its Medicaid segment rose 50% and its commercial segment rose 7% over the same period. Centene's Medicare PDP segment produced revenues of $674 million during the quarter.

The company did experience a more than 4% decline in its health benefits ratio, citing "lower medical utilization due to the COVID-19 pandemic."

Centene was also named in a $1.125 billion RICO lawsuit filed by Sovereign Health in mid-May.

Related: Centene, Health Net, Lawyers Slapped with $1.1B RICO Suit

In early June, Centene inked a four-year contract extension to serve Kentucky's Medicaid program.

Earlier this month, Centene also announced that it will establish its East Coast headquarters in Charlotte, a project which is expected to create 3,200 jobs, according to the insurer.

For complete financial information, review Centene's filing with the Securities and Exchange Commission.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

Photo credit: KIEV, UKRAINE - Dec 11, 2018: Centene Corporation Insurance company logo seen displayed on smart phone. - Image / Editorial credit: IgorGolovniov / Shutterstock.com


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