Midwest managed care insurer Centene is on a roll. It beat Wall Street's first quarter expectations, increased membership and has its eyes on a new international venture.
Through March 31, St. Louis-based Centene pulled in $3.4 billion in revenue, 38 percent more year-over-year, along with another 332,300 members, mostly via Medicaid, a 13 percent increase from last year's first quarter.
The company posted earnings of $33 million, or $0.57 in diluted earnings per share, exceeding a $0.42 consensus, after accounting for $0.16 per share from the Affordable Care Act's insurance fee and $0.06 per share from a recent acquisition. Centene is now forecasting full-year earnings per share of between $3.60 and $3.90 per share.
The revenue increase was driven largely from Medicaid business expansions in Florida and Ohio, new Medicaid contracts in California and New Hampshire, three new contracts for Centurion, Centene's joint venture with MHM Services offering behavioral health services to jails and prisons, and two recent acquisitions, AcariaHealth, a speciality pharmacy, and U.S. Medical Management, a home health management company.
Of the new members, 39,700 are from public health insurance exchanges and 99,700 are from Medicaid expansion in California, Massachusetts, Ohio and Washington.
Centene also offered a few details about its new overseas venture. Centene signed a definitive agreement to buy a non-controlling stake in a Ribera Salud SA, a Spanish health management group that is " highly regarded for its ACO-like, public-private partnership healthcare model," the company said. Centene will be a joint shareholder with Banco Sabadell, Spain's fourth largest private bank.
"The company continues to diversify and add capabilities to the business, driving significant revenue and earnings growth year over year in the first quarter of 2014," Centene chairman and CEO Michael Neidorff said in a media release.
Centene also saw an improved medical loss ratio in the first quarter, of 89.3 percent, compared to 90.2 percent in first quarter 2013. For 2014, the company is expecting an MLR of between 88.7 percent and 89.2 percent.
Centene's results give investors a bit of breather, after UnitedHealth Group's first quarter results had some expecting a "messy quarter," as Leerink analyst Ana Gupte put it.
Unlike United, Centene did not go into detail about an area of spending that's challenging for a lot of managed care insurers, the new hepatitis C drug Sovaldi.
Earlier this year, though, Centene's chief medical officer, Mary Mason, MD, said that they're using a "rigorous review" for new Sovaldi requests, and as of February had approved 22 of them.