CLAYTON — Centene Corp. said on Tuesday that revenues and profits steadily grew last quarter. But at the same time, the new CEO of the Clayton-based insurance giant promised a more integrated, streamlined company — with a smaller real estate footprint.
The company has said for months it intends to increase hybrid and remote work options. Its new CEO, Sarah London, reiterated that during a call with investors on Tuesday, saying she anticipates “a significant downsizing of our current leased space.â€
London did not say whether the company is considering cutting back any of its St. Louis-area real estate. In an email following the call, a company spokesperson said during the first quarter Centene has “made meaningful progress†in evaluating its real estate portfolio.
“Like many other large employers, we continue to evaluate our workplace and facility requirements, including our Clayton headquarters, as we activate new hybrid working styles,†the spokesperson said.
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London is a resident of St. Louis and works out of the Clayton headquarters, a company spokesperson said earlier this month.
Tuesday marks the company’s first quarterly earnings since London became CEO.
Michael Neidorff served as Centene’s CEO since 1996 and had intended to retire by the end of 2022. He took a medical leave of absence in late February, and on March 22, London was appointed as the new CEO. Neidorff passed away on April 7 at the age of 79.
London said on Tuesday that Centene has grown its office of the chief executive — a group formed last year as a step toward succession planning — to include Chief Financial Officer Drew Asher, Chief Transformation Officer Jim Murray and Magellan Health CEO Ken Fasola. Chief Operating Officer Brent Layton and London are also members.
The company is also beginning to consolidate its IT structure, London said. Much of Centene’s growth has come through acquiring other companies, but that has left it with a variety of software, London said. Before becoming CEO, London led the company’s technology and digital strategy.
“As we look ahead, consistency of results and operational excellence will remain top priorities for this management team as we drive towards sustainable and profitable long-term growth,†London said in a statement.
Revenues for the quarter ended on March 31 rose 24% to $37.2 billion, from $30 billion for the same period last year. Earnings totaled $849 million, up 21% from $699 million last year. Adjusted earnings per share rose to $1.83 from $1.63.
Managed care membership rose 8%, to 26.2 million.
Centene’s health benefits ratio — which reflects medical claim costs over income from premiums — rose to 87.3%, from 86.8%.
Medicaid services — the largest segment of Centene’s membership — have returned to pre-pandemic levels, Asher said. Pediatric checkups and preventive screenings have “snapped back.†Adult visits and non-urgent emergency department visits are still lagging.
“We’re largely back to pre-pandemic levels,†Asher said.
London is expected to focus on improving profits, not making more acquisitions