On March 3, 2020 Centene Corporation (NYSE: CNC) reported its updated 2020 financial guidance, incorporating the effect of the closing of the WellCare acquisition on January 23, 2020 (Press release, Centene , MAR 3, 2020, View Source [SID1234555149]). Total revenues are expected to be $104.8 billion to $105.6 billion, and diluted earnings per share are expected to be $3.00 to $3.14. Adjusted diluted earnings per share for 2020 are expected to be $4.56 to $4.76.
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"The Company is well positioned to maintain its momentum in 2020," said Michael Neidorff, Chairman, President and CEO of Centene.
For its 2020 fiscal year, the Company’s guidance is as follows:
Total revenues in the range of approximately $104.8 billion to $105.6 billion.
Diluted earnings per share of approximately $3.00 to $3.14.
Adjusted diluted earnings per share of approximately $4.56 to $4.76.
Health benefits ratio of approximately 85.9% to 86.3%.
Selling, general and administrative (SG&A) expense ratio of approximately 9.3% to 9.7%.
Adjusted SG&A expense ratio of approximately 8.9% to 9.3%, which excludes approximately $385 million of acquisition related expenses.
Effective tax rate of approximately 38.0% to 40.0%, including the effect of the Health Insurer fee.
Diluted shares outstanding of approximately 584.5 million to 587.5 million.
The Company’s guidance includes the following:
A benefit of $0.09 per diluted share as a result of the timing of the WellCare transaction, which closed on January 23, 2020. This includes the effect of the pro-ration of January’s results, substantially offset by the lack of a full year of synergy capture, and the lower share count due to the timing of the acquisition closure.
We received a potential rate decrease from the State of New York on February 6, 2020, which would result in an overall pre-tax net rate reduction of approximately $200 million. While not final, we have begun to develop initiatives to mitigate a portion of the potential rates for 2020. We currently expect $150 million of the adjustment to potentially lower our pre-tax earnings for the year, resulting in a $0.17 reduction to our GAAP and adjusted diluted earnings per share guidance.
Conference Call & Presentation
As previously announced, the Company will host a conference call Wednesday, March 4, 2020, at approximately 8:30 AM (Eastern Time) to review the 2020 financial guidance. Michael Neidorff and Jeffrey Schwaneke will host the conference call.
The Company has also posted slides to its website under the investor relations section as a supplement for the conference call.
Investors and other interested parties are invited to listen to the conference call by dialing 1-877-883-0383 in the U.S. and Canada; +1-412-902-6506 from abroad, including the following Elite Entry Number: 0997408, to expedite caller registration; or via a live, audio webcast on the Company’s website at www.centene.com, under the Investors section.
A webcast replay will be available for on-demand listening shortly after the completion of the call for the next 12 months or until 11:59 p.m. (Eastern Time) on Wednesday, March 3, 2021, at the aforementioned URL. In addition, a digital audio playback will be available until 9 a.m. (Eastern Time) on Thursday, March 12, 2020, by dialing 1-877-344-7529 in the U.S. and Canada, or +1-412-317-0088 from abroad, and entering access code 10139468.