ST. LOUIS, June 12, 2020 /PRNewswire/ -- Centene
Corporation (NYSE: CNC) announced on June
12, 2020 its updated 2020 financial guidance. Total revenues
are expected to be $109.5 billion to
$111.9 billion, and diluted earnings
per share are expected to be $3.06 to
$3.20. Adjusted diluted earnings per
share for 2020 are expected to be $4.76 to $4.96,
representing a $0.20 increase at the
midpoint.
The Company's updated guidance reflects the following:
- Total revenues reflect the delay in the startup of the
North Carolina contract until
2021.
- Diluted earnings per share and adjusted diluted earnings per
share reflect current estimates around membership, revenue and
medical utilization trends.
"Our increased earnings guidance for the full year demonstrates
the strength of our business and our ability to navigate the
pandemic while meeting the critical needs of our members, providers
and state partners," said Michael
Neidorff, Chairman, President and Chief Executive Officer of
Centene Corporation. "We continue to see tremendous opportunity in
a dynamic healthcare environment as the roles of managed care
companies have never been more important than they are today.
Today's virtual investor day will highlight the details of our near
and long-term growth strategies across our Medicaid, Medicare and
Marketplace businesses as well as our operational agility. We
also acknowledge the deep-rooted racial and social justice issues
at hand and stand united in our resolve to help drive systemic
change in our country, through various initiatives such as the
creation of our Health Disparities Task Force."
Webcast & Presentation
As previously announced, the Company will host a virtual
investor meeting today, including a question-and-answer session.
The event will begin promptly at 8:30 AM
(Eastern Time). Investors and other interested parties are
invited to watch the investor meeting via a live streamed webcast
on the Company's website and view a copy of the investor
presentation at www.centene.com, under the Investors
section.
Non-GAAP Financial Presentation
The Company is providing certain non-GAAP financial measures in
this release as the Company believes that these figures are helpful
in allowing investors to more accurately assess the ongoing nature
of the Company's operations and measure the Company's performance
more consistently across periods. The Company uses the presented
non-GAAP financial measures internally to allow management to focus
on period-to-period changes in the Company's core business
operations. Therefore, the Company believes that this information
is meaningful in addition to the information contained in the GAAP
presentation of financial information. The presentation of this
additional non-GAAP financial information is not intended to be
considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
Specifically, the Company believes the presentation of non-GAAP
financial information that excludes amortization of acquired
intangible assets, acquisition related expenses, as well as other
items, allows investors to develop a more meaningful understanding
of the Company's performance over time. The table below provides
reconciliations of non-GAAP items per share:
|
|
Annual Guidance
December 31, 2020
|
GAAP diluted
EPS
|
|
$3.06 -
$3.20
|
Amortization of
acquired intangible assets (1)
|
|
$0.98 -
$1.00
|
Acquisition related
expenses (2)
|
|
$0.65 -
$0.69
|
Other adjustments
(3)
|
|
$0.07
|
Adjusted diluted
EPS
|
|
$4.76 -
$4.96
|
|
|
(1)
|
The amortization of
acquired intangible assets per diluted share presented above are
net of the income tax benefit of an estimated $0.30 to $0.32 for
the year ended December 31, 2020.
|
(2)
|
The acquisition
related expenses per diluted share presented above are net of the
income tax benefit of an estimated $0.10 to $0.11 for the year
ended December 31, 2020.
|
(3)
|
Other adjustments for
2020 include the following items:
|
|
(a) gain on the sale
of the Illinois health plan of an estimated $0.10 per diluted
share, net of income tax expense of $0.06;
|
|
(b) non-cash
impairment of our third party-care management software system of an
estimated $0.10 per diluted share, net of an income tax benefit of
$0.03; and
|
|
(c) debt
extinguishment costs of an estimated $0.07 per diluted share, net
of an income tax benefit of $0.02.
|
About Centene Corporation
Centene Corporation, a Fortune 50 company, is a leading
multi-national healthcare enterprise that is committed to helping
people live healthier lives. The Company takes a local approach –
with local brands and local teams - to provide fully integrated,
high-quality, and cost-effective services to government-sponsored
and commercial healthcare programs, focusing on under-insured and
uninsured individuals. Centene offers affordable and
high-quality products to nearly 1 in 15 individuals across the
nation, including Medicaid and Medicare members (including Medicare
Prescription Drug Plans) as well as individuals and families served
by the Health Insurance Marketplace, the TRICARE program, and
individuals in correctional facilities. The Company also serves
several international markets, and contracts with other healthcare
and commercial organizations to provide a variety of specialty
services focused on treating the whole
person. Centene focuses on long-term growth and the
development of its people, systems and capabilities so that it can
better serve its members, providers, local communities, and
government partners.
Centene uses its investor relations website to publish important
information about the company, including information that may be
deemed material to investors. Financial and other information about
Centene is routinely posted and is accessible on Centene's investor
relations website, http://www.centene.com/investors.
Forward-Looking Statements
All statements, other than statements of current or
historical fact, contained in this press release are
forward-looking statements. Without limiting the foregoing,
forward-looking statements often use words such as "believe,"
"anticipate," "plan," "expect," "estimate," "intend," "seek,"
"target," "goal," "may," "will," "would," "could," "should," "can,"
"continue" and other similar words or expressions (and the negative
thereof). Centene (the Company, our, or we) intends such
forward-looking statements to be covered by the safe-harbor
provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and we are including this
statement for purposes of complying with these safe-harbor
provisions. In particular, these statements include, without
limitation, statements about our future operating or financial
performance, market opportunity, growth strategy, competition,
expected activities in completed and future acquisitions, including
statements about the impact of our recently completed acquisition
(the WellCare Acquisition) of WellCare Health Plans,
Inc. (WellCare), other recent and future acquisitions,
investments and the adequacy of our available cash resources. These
forward-looking statements reflect our current views with respect
to future events and are based on numerous assumptions and
assessments made by us in light of our experience and perception of
historical trends, current conditions, business strategies,
operating environments, future developments and other factors we
believe appropriate. By their nature, forward-looking statements
involve known and unknown risks and uncertainties and are subject
to change because they relate to events and depend on circumstances
that will occur in the future, including economic, regulatory,
competitive and other factors that may cause our or our industry's
actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these
forward-looking statements. These statements are not guarantees of
future performance and are subject to risks, uncertainties and
assumptions. All forward-looking statements included in this press
release are based on information available to us on the date
hereof. Except as may be otherwise required by law, we undertake no
obligation to update or revise the forward-looking statements
included in this press release, whether as a result of new
information, future events or otherwise, after the date hereof. You
should not place undue reliance on any forward-looking statements,
as actual results may differ materially from projections,
estimates, or other forward-looking statements due to a variety of
important factors, variables and events including but not limited
to: the impact of COVID-19 on global markets, economic conditions
and the healthcare industry and our results of operations, which is
unknown; uncertainty as to our expected financial performance
following completion and integration of the WellCare Acquisition;
the possibility that the expected synergies and value creation from
the WellCare Acquisition will not be realized, or will not be
realized within the expected time period; the risk that unexpected
costs will be incurred in connection with the integration of the
WellCare Acquisition or that the integration of WellCare will be
more difficult or time consuming than expected; unexpected costs,
charges or expenses resulting from the WellCare Acquisition; the
inability to retain key personnel; disruption from the completion
of the WellCare Acquisition, including potential adverse reactions
or changes to business relationships with customers, employees,
suppliers or regulators, making it more difficult to maintain
business and operational relationships; the risk that we may not be
able to effectively manage our expanded operations; our ability to
accurately predict and effectively manage health benefits and other
operating expenses and reserves; competition; membership and
revenue declines or unexpected trends; changes in healthcare
practices, new technologies, and advances in medicine; increased
healthcare costs; changes in economic, political or market
conditions; changes in federal or state laws or regulations,
including changes with respect to income tax reform or government
healthcare programs as well as changes with respect to the Patient
Protection and Affordable Care Act and the Health Care and
Education Affordability Reconciliation Act, collectively referred
to as the Affordable Care Act (ACA) and any regulations enacted
thereunder that may result from changing political conditions or
judicial actions, including the ultimate outcome in "Texas v. United States of America"
regarding the constitutionality of the ACA; rate cuts or other
payment reductions or delays by governmental payors and other risks
and uncertainties affecting our government businesses; our ability
to adequately price products on the Health Insurance Marketplaces
and other commercial and Medicare products; tax matters; disasters
or major epidemics; the outcome of legal and regulatory
proceedings; changes in expected contract start dates; provider,
state, federal and other contract changes and timing of regulatory
approval of contracts; the expiration, suspension, or termination
of our contracts with federal or state governments (including but
not limited to Medicaid, Medicare, TRICARE or other customers); the
difficulty of predicting the timing or outcome of pending or future
litigation or government investigations; challenges to our contract
awards; cyber-attacks or other privacy or data security incidents;
the possibility that the expected synergies and value creation from
acquired businesses, including businesses we may acquire in the
future, will not be realized, or will not be realized within the
expected time period; the exertion of management's time and our
resources, and other expenses incurred and business changes
required in connection with complying with the undertakings in
connection with any regulatory, governmental or third party
consents or approvals for acquisitions; disruption caused by
significant completed and pending acquisitions, including, among
others, the WellCare Acquisition, making it more difficult to
maintain business and operational relationships; the risk that
unexpected costs will be incurred in connection with the completion
and/or integration of acquisition transactions; changes in expected
closing dates, estimated purchase price and accretion for
acquisitions; the risk that acquired businesses will not be
integrated successfully; the risk that we may not be able to
effectively manage our operations as they have expanded as a result
of the WellCare Acquisition; restrictions and limitations in
connection with our indebtedness; our ability to maintain or
achieve improvement in the Centers for Medicare and Medicaid
Services (CMS) Star ratings and maintain or achieve
improvement in other quality scores in each case that can impact
revenue and future growth; availability of debt and equity
financing, on terms that are favorable to us; inflation; foreign
currency fluctuations; and risks and uncertainties discussed in the
reports that Centene has filed with the Securities
and Exchange Commission. This list of important factors is not
intended to be exhaustive. We discuss certain of these matters more
fully, as well as certain other factors that may affect our
business operations, financial condition and results of operations,
in our filings with the Securities and Exchange
Commission (SEC), including our annual report on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K.
Due to these important factors and risks, we cannot give
assurances with respect to our future performance, including
without limitation our ability to maintain adequate premium levels
or our ability to control our future medical and selling, general
and administrative costs.
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SOURCE Centene Corporation