Benzinga | Oct 26, 2021 03:59PM EDT

Centene Raises Sales Outlook, Narrows Earnings Guidance For FY21

* Centene Corporation (NYSE: CNC) has reported Q3 adjusted EPS of $1.26, slightly beating the consensus estimate of $1.25.

* Sales increased 11% Y/Y to $32.4 billion, ahead of the consensus of $31.62 billion.

* The increase was due to Medicaid membership growth, recent acquisitions of PANTHERx and Circle Health, and the commencement of contracts in North Carolina, partially offset by the repeal of the health insurer fee.

* Health Benefits Ratio (HBR) improved to 88.1%, from 86.4%. The Company says that the HBR for Q3 of 2021 was negatively impacted by the repeal of the health insurer fee.

* Managed care membership reached 26.5 million, +5% Y/Y.

* Centene generated an operating cash flow of $1.8 billion, or 3.1 times net earnings.

* The cost of service ratio was 82.7%, down from 93.4% a year ago, driven by a lower cost of service ratio at Circle Health business and favorable results from shared savings programs in the physician home health business.

* FY 2021 Guidance: Centene sees an adjusted EPS of $5.05-$5.15 versus $5.05 - $5.35 expected earlier and the consensus of $5.11.

* It expects FY21 sales of $125.2 billion - $126.4 billion, higher than the prior outlook of $123.3 billion - $125.3 billion, compared to the analysts' estimate of $125.06 billion.

* Price Action: CNC shares traded higher by 4.56% at $71.06 on the last check Tuesday.