Centene Corporation Announces 2019 Guidance

Centene Corporation announced its 2019 financial guidance. Total revenues are expected to be USD 69.7 billion to USD 70.5 billion, representing growth of approximately 17 percent compared to the midpoint of the 2018 guidance range. Diluted earnings per share for 2019 are expected to be USD 7.23 to USD 7.59 (pre-split). Adjusted diluted earnings per share for 2019 are expected to be USD 8.15 to USD 8.55 (pre-split), representing an increase of 19 percent compared to the midpoint of the 2018 guidance range. On December 12, 2018, the Board of Directors declared a two-for-one split of Centene’s common stock in the form of a 100 percent stock dividend that is expected to be effective in the first quarter of 2019. The split is subject to stockholder approval of an amendment to Centene’s certificate of incorporation to increase the number of authorized shares of common stock. For its 2019 fiscal year, the Company expects the following:

• Total revenues in the range of USD 69.7 billion to USD 70.5 billion.
• Health benefits ratio of approximately 86.6 percent to 87.1 percent.
• Selling, general and administrative (SG&A) and Adjusted SG&A expense ratio of approximately 9.2 percent to 9.7 percent.
• Effective tax rate of approximately 24.5 percent to 26.5 percent.
• Diluted shares outstanding of approximately 210.4 million to 211.4 million (420.8 million to 422.8 million post-split).
• Diluted earnings per share of approximately USD 7.23 to USD 7.59 (USD 3.62 to USD 3.80 post-split).
• Adjusted diluted earnings per share of approximately USD 8.15 to USD 8.55 (USD 4.08 to USD 4.28 post-split).

The Company affirms its 2018 revenue guidance in the previously announced range for total revenues of USD 59.8 billion to USD 60.3 billion, diluted earnings per share of approximately USD 4.34 to USD 4.50 (pre-split), and adjusted diluted earnings per share of approximately USD 6.90 to USD 7.10 (pre-split). Full year 2018 earnings will be reported on February 5, 2019, at 6:00 AM, with a conference call at 8:30 AM (Eastern Time).

Investor meeting

Centene Corporation will host an investor meeting tomorrow at the Pierre Hotel in New York City, including a question-and-answer session, to discuss the details of its guidance. The meeting will begin promptly at 8:30 AM (Eastern Time)and end at approximately 1:15 PM (Eastern Time). Investors and other interested parties who are unable to attend in person are invited to listen to the investor meeting via a live, audio 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.

The Company references Adjusted SG&A Expense Ratio, however the Company cannot provide a reconciliation of Adjusted SG&A Expense Ratio guidance without unreasonable efforts.  As such, it has been excluded from the reconciliation below. 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. – Medical Buyer Bureau