Centene Surges After Unveiling Strong Growth Plans at Investor Day
Centene Corporation (NYSE:CNC) shares rose by 2% in pre-market trading on Thursday after the company announced a financial outlook that exceeded Wall Street's earnings expectations. During Investor Day, Centene provided a forecast for adjusted diluted earnings per share (EPS) of over $7.25 for 2025, surpassing the consensus estimate of $7.05. The healthcare company also confirmed its guidance for adjusted diluted EPS for 2024, expecting it to be above $6.80, which is higher than the anticipated $6.73.
Centene's CEO, Sarah M. London, highlighted the company's commitment to delivering quality care to its 28 million members, drawing attention to improvements in core operations and investments in customer and provider experiences. London stated, "This morning, we are reiterating our guidance of adjusted diluted EPS of over $6.80 for 2024. Additionally, we have announced guidance for adjusted diluted EPS of over $7.25 for 2025, representing more than 6% annual growth."
The company's financial guidance for the fiscal year 2025 includes total revenue between $166.5 billion and $169.5 billion and premium and service revenues between $154.0 billion and $156.0 billion. The guidance also forecasts GAAP diluted EPS of over $6.19 and adjusted diluted EPS of over $7.25. Centene expects a health benefits ratio (HBR) between 88.4% and 89.0%, with both selling, general, and administrative (SG&A) expenses and adjusted SG&A expense ratios expected to be between 8.1% and 8.7%. An effective tax rate is projected to be between 21.5% and 22.5%, while the adjusted effective tax rate is expected to be between 22.0% and 23.0%. The number of diluted shares is estimated to be between 491.0 million and 494.0 million.
For 2024, Centene reiterated its guidance for premium and service revenues between $143.5 billion and $144.5 billion, an HBR between 88.3% and 88.5%, and adjusted diluted EPS of over $6.80. The company plans to announce its full-year earnings for 2024 on February 4, 2025, at 6:00 AM Eastern Time, followed by a conference call at 8:30 AM.