Benzinga | Jul 27, 2021 11:13AM EDT

Centene Reports Mixed Bag On Q2 Earnings, Raises FY2021 Sales Outlook

* Centene Corporation (NYSE:CNC) reported Q2 adjusted EPS of $1.25, missing the consensus estimate of $1.39 and lower than $2.40 reported a year ago.

* Sales for the quarter increased 12% Y/Y to $31.0 billion, slightly ahead of the consensus of $30.1 billion.

* The increase was due to Medicaid membership growth resulting from the ongoing suspension of eligibility redeterminations, membership growth in the Medicare business, and recent acquisition of PANTHERx, partially offset by the repeal of the health insurer fee.

* Health Benefits Ratio improved to 88.3%, from 82.1%, attributable to overall lower utilization in Q2 of 2020 due to the pandemic, higher utilization in the Marketplace business in Q2 of 2021.

* Managed care membership reached 25.4 million, +3% Y/Y.

* For the quarter, GAAP diluted EPS loss came in $(0.92), a turnaround from the income of $2.05 a year ago. During the quarter, Centene recorded a legal settlement reserve estimate of $1.25 billion.

* IT generated an operating cash flow of $1.7 billion for Q2.

* FY 2021 Guidance: Centene sees an adjusted EPS of $5.05-$5.35 in line with the consensus of $5.20.

* It expects FY21 higher sales of $123.3 billion - $125.3 billion (higher than consensus of $120.7 billion at the midpoint of $124.3 billion), compared to $120.1 billion - $122.1 billion reported in the Q1 release.

* Price Action: CNC shares closed at $72.67 on Monday.