Tag Archives: Centene Corp

Business

Xerox, Logitech, Upstart, Hibbett, Planet Fitness & more

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Check out the companies making headlines in midday trading.

Logitech — The computer peripherals maker jumped 11.8% after Logitech reiterated its full-year guidance, which was lowered in July. Logitech has struggled with weaker demand after a boom in sales during the height of the pandemic.

Upstart — Shares surged 9.8% even after Mizuho initiated Upstart with an underperform rating, saying that there are more challenges ahead for the consumer lending company.

Stem — The stock rose 12.3% after UBS initiated Stem as a buy, saying that AI-driven energy storage company is a market leader that will get a boost from the Inflation Reduction Act.

Hibbett — The sporting goods stocks advanced 9.2% following an upgrade from Bank of America to a buy rating. The bank highlighted the company relationship with Nike and product availability among its reasons for liking the stock.

Xerox — Shares plunged 15% after the seller of print and digital document products and services reported disappointing earnings and cut its full-year revenue guidance. Xerox CEO Steve Bandrowczak said in a release that “profitability remains challenged by persistently high inflation and continued supply chain constraints.”

Brown & Brown — Shares of the insurance company dropped 11% after Brown & Brown missed earnings expectations. Brown & Brown posted earnings of 50 cents per share on revenue of $927.6 million. The company was expected to report earnings of 60 cents per share on revenue of $945.8 million, according to consensus estimates on FactSet.

Qualtrics International — Shares of the customer feedback software company jumped 7.7% after Qualtrics reported earnings that exceeded expectations, and raised its full-year outlook.

Ross Stores — Shares of the off-price retail jumped 5.8% following an upgrade to overweight from Wells Fargo. The bank called Ross Stores one of the “best ways” to trade the sector.

SAP — Shares of the German business software company advanced 6% after SAP reported quarterly results that topped expectations and maintained its full-year forecast.

PulteGroup — The home construction company jumped 5.9% despite disappointing earnings expectations. PulteGroup posted earnings of $2.69 per share on revenue of $3.94 billion. Analyst surveyed by Refinitiv were expecting earnings of $2.82 per share on revenue of $4.17 billion.

JetBlue — The airline slid 3.6% after a third-quarter earnings miss of 21 cents per share, versus a Refinitiv consensus estimate of 23 cents. Revenue was in line with estimates, at $2.56 billion. JetBlue had a quarterly profit of $57 million, due to elevated travel demand and higher fares, which helped offset rising costs.

Planet Fitness — The gym stock jumped 4.5% after Piper Sandler upgraded Planet Fitness to overweight from neutral, saying that shares are attractive and will get a boost from participation from younger generations.

General Motors — Shares of General Motors rose 3.6% after the automaker handily beat third-quarter earnings expectations. The company also maintained its full-year outlook.

United Parcel Service — Shares of the delivery company gained 1% after UPS reported stronger-than-expected earnings for the third quarter. The company earned an adjusted $2.99 per share, 15 cents better than analysts expected, according to Refinitiv. Revenue fell short of expectations, however, as its supply chain solutions segment declined year over year. UPS did maintain its full-year guidance.

General Electric — The stock declined 1.8% after General Electric cut its full-year outlook because of supply chain issues. The company otherwise posted stronger-than-expected revenue.

— CNBC’s Michelle Fox, Jesse Pound, Carmen Reinicke and Samantha Subin contributed reporting.

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Business

Centene’s cuts pleased investors, but may be ‘disastrous’ for St. Louis’ office market | Local Business

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Steph Kukuljan
, 

Annika Merrilees

CLAYTON — For decades, managed health care company Centene Corp. focused on scale. Now one of the largest in its industry, Centene is recalibrating for efficiency.

The shift in strategy brought an abrupt end this week to its plans for an East Coast headquarters in North Carolina, stunning local leaders there but pleasing Wall Street. With 90% of its workforce now fully or partly remote, the company has been quietly relinquishing most of its once expansive office footprint in St. Louis and across the country.

The company may not have had a choice: Investors wanted the company to cut costs and improve profit margins. With a new CEO at the helm, the company has been aggressively slimming its real estate portfolio across the country — moves that are likely to improve its bottom line but leave cities, like the St. Louis region, grappling with dozens of vacant office buildings.

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“Making sure that Centene delivers on its promises of margin expansion is something that investors take very seriously,” said Julie Utterback, senior equity analyst at Morningstar Research Services. “It sounds like this management team is taking that very seriously as well, which is appreciated.”

The East Coast campus wasn’t Centene’s only casualty. The company already said it was no longer going to finish its $770 million headquarters expansion in Clayton that would have added nearly 1 million square feet of office space, hundreds of apartments or condos, retail shops, a 1,000-seat civic auditorium and a hotel near South Hanley Road and Forsyth Boulevard.

And Centene has vacated nearly its entire real estate footprint here — approximately 1 million square feet of office space — according to marketing materials shopping those properties for lease or sublease:

• Roughly 300,000 square feet in Chesterfield.

• 180,000 square feet in Des Peres.

• 100,000 square feet in Richmond Heights.

• 100,000 square feet in Creve Coeur.

• More than 60,000 square feet in St. Louis city.

The company confirmed in a statement that it will vacate “several leased locations,” though it did not state which ones. The Centene spokesperson also said it will maintain its headquarters in Clayton, operations center in Ferguson and its Home State Health headquarters in St. Louis — despite a marketing brochure advertising the entire building for sublease.

It’s an about-face to how the company previously operated, gobbling any block of office space in the region that was 75,000 square or feet more. And it comes on the heels of the pandemic that cooled the office market as companies rethought their needs, commercial real estate experts said.

“The Centene effect, combined with the COVID effect, is disastrous for the St. Louis market,” said Kevin McLaughlin of KMA Commercial Real Estate.

And the Centene offices are coming on the market at a time when St. Louis already has a surplus of office space.

“There’s tons of competition you didn’t have three to five years ago,” McLaughlin said.

Centene’s expansive real estate portfolio was a product of its former CEO, Michael Neidorff, who led the initial plans for the East Coast headquarters that was to bring 3,900 jobs to North Carolina.

For years under Neidorff, Centene succeeded through growth. Neidorff expanded the company from a $40 million health plan to a giant in the managed care industry, bringing in $126 billion in revenues last year. Neidorff took a medical leave of absence in February, and Sarah London was named as his replacement in March. Neidorff died in April at the age of 79.

After years of acquisitions, investors have been looking for change. Analysts said the company’s stock price was underperforming, relative to its peers. Last year the company announced a plan to improve margins and shed non-essential assets. After an activist investor stepped in last year, the company agreed to overhaul its board of directors.

During an earnings report in July, Centene said it planned to decrease its domestic leased space by 70%, which it expected would save $200 million in rent each year.

“From my perspective, having two corporate headquarters is not a way to gain efficiency,” Utterback, the Morningstar analyst, said.

The company also announced plans to sell a Spanish hospital business and a company that runs radiology clinics in Slovakia and the Czech Republic.

Investors seem pleased with the moves. After news broke that Centene was scrapping its East Coast headquarters plans, Wall Street reacted with enthusiasm: Centene stock rose 1.6% on Friday, closing at $96.90.

In Clayton, where officials are still dismantling its development agreement with the company, Mayor Michelle Harris said the company’s presence is a real positive for the region.

And its decision to not carry out its East Coast campus brought “some closure for the community” that Centene isn’t going to leave the St. Louis area.

“I’m hoping their employees come to lunch in Clayton,” Harris said.

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Business

This is a treacherous market filled with extreme stock moves

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CNBC’s Jim Cramer on Friday offered viewers his game plan for the next five trading days on Wall Street.

The “Mad Money” host’s lookahead came after the S&P 500 and Nasdaq Composite posted their best weeks so far in 2022, finishing 1.5% and 2.4% higher, respectively.

“This week we saw the true colors of what is a treacherous market,” the “Mad Money” host said. If investors love a stock, there’s “no level it won’t be taken up to,” he said. “But if it’s hated? There are no depths it won’t sink to. Either way … it’s likely to be an extreme.”

All revenue and earnings per share estimates are from FactSet.

Monday: Tyson Foods, Two-Take Interactive and Simon Property Group

Tyson Foods

  • Q1 earnings release before the bell; conference call at 9 a.m. ET
  • Projected EPS: $1.93
  • Projected revenue: $12.17 billion

Cramer said the company’s quarter should provide insights into the country’s meat supply chain, which has experienced a host of challenges during the Covid pandemic.

Take-Two Interactive

  • Q3 earnings release after the close; conference call at 4:30 p.m. ET
  • Projected EPS: $1.12
  • Projected sales: $868 million

Take-Two’s quarter will provide a glimpse into how much of the pandemic-related surge in gaming has stuck around, Cramer said. “[CEO] Strauss Zelnick is the straightest of straight shooters. If demand is waning, he’s just going to say it.”

Simon Property Group

  • Q4 earnings release after the bell; conference call at 5 p.m.
  • Projected EPS: $2.89
  • Projected revenue: $1.25 billion

Tuesday: Centene, Pfizer, Chipotle, DuPont and Peloton

Centene

  • Q4 earnings before the open; conference call at 8:30 a.m. ET
  • Projected EPS: 98 cents
  • Projected revenue: $32.5 billion

“I think it’s a takeover target and I bet we’ll get a very good quarter,” Cramer said of the health insurer.

Pfizer

  • Q4 earnings before the bell; conference call at 10 a.m. ET
  • Projected EPS: 87 cents
  • Projected sales: $24.16 billion

Cramer also said he expects very good numbers from Pfizer.

DuPont

  • Q4 earnings before the open; conference call at 8 a.m. ET
  • Projected EPS: 99 cents
  • Projected revenue: $4.02 billion

“The great industrials have had a real up and down time in this market and I fear this could be DuPont’s down time, which is why we finally decided to ring the register for a terrific profit for the charitable trust,” Cramer said.

Chipotle

  • Q4 earnings after the close; conference call at 4:30 p.m. ET
  • Projected EPS: $5.25
  • Projected sales: $1.96 billion

Cramer said Chipotle’s quarter is the one he’s most interested in Tuesday. “I think it could do low double-digit same-store sales versus last year’s already excellent numbers and that should cause the stock to ignite,” he said. “Raw costs are always a problem in the business, though.”

Peloton

  • Q2 earnings after the close; conference call at 5 p.m. ET
  • Projected EPS: Loss of $1.22
  • Projected revenue: $1.14 billion

Cramer said he’s looking for a host of updates from Peloton’s management after the exercise equipment maker’s stock has been pummeled in recent months. One topic that is likely to come up is The Wall Street Journal’s report Friday that Amazon has approached Peloton about a potential deal, Cramer said.

Wednesday: CVS Health, PepsiCo, Disney and Mattel

CVS Health

  • Q4 earnings release before the bell; conference call at 8 a.m. ET
  • Projected EPS: $1.83
  • Projected sales: $75.66 billion

“I expect a very good quarter from CVS [because of] Covid testing, but what happens next?” Cramer said. “Have they monetized the vaccination seekers? That would take it to the next level.”

PepsiCo

  • Q4 earnings release before the open; conference call at 8:15 a.m. ET
  • Projected EPS: $1.52
  • Projected revenue: $24.24 billion

Cramer said he was surprised the beverage giant’s stock fell 1.6% Friday, suggesting he’d pick up some shares ahead of the quarterly print.

Disney

  • Q1 earnings release after the close; conference call at 4:30 p.m. ET
  • Projected EPS: 73 cents
  • Projected revenue: $20.27 billion

Cramer said he thinks the media and entertainment giant does not get enough credit for the value of its intellectual property. “This isn’t Netflix. It isn’t Facebook. It’s a one-of-a-kind growth vehicle. It is not stagnant. It is not dead, and that’s why I’d like to build a bigger position ahead of the quarter for my trust,” he said.

Mattel

  • Q4 earnings release after the close; conference call at 5 p.m. ET
  • Projected EPS: 33 cents
  • Projected revenue: $1.66 billion

“I think there could be a whole new slate of toys and entertainment from CEO Ynon Kreiz, who’s been a turnaround whizz,” Cramer said.

Thursday: Coca-Cola, Twitter, Cloudflare and Zendesk

Coca-Cola

  • Q4 earnings release before the bell; conference call at 8:30 a.m. ET
  • Projected EPS: 41 cents
  • Projected revenue: $8.98 billion

While Cramer said he expects a good quarter from Coca-Cola, he specifically mentioned looking for updates on the beverage maker’s partnership with Molson Coors on a Topo Chico hard seltzer. “I think this is the next big spiked [beverage],” Cramer said.

Twitter

  • Q4 earnings release before the bell; conference call at 8 a.m. ET
  • Projected EPS: 33 cents
  • Projected revenue: $1.58 billion

It’s unclear whether Twitter’s digital ad business faces challenges like Facebook parent Meta or is growing just fine like Amazon or Alphabet, Cramer said. “I think we’ll find out that it remains the same old plodding Twitter when it reports—a company that has nothing we truly want to pay up for,” Cramer said.

Cloudflare

  • Q4 earnings after the close; conference call at 5 p.m. ET
  • Projected EPS: 0 cents
  • Projected revenue: $185 million

Cramer said he’s anticipating “great numbers” from the cybersecurity firm, but “I don’t expect anyone to care” because the stock is out of favor on Wall Street.

Zendesk

  • Q4 earnings after the bell; conference call at 5 p.m. ET
  • Projected EPS: 18 cents
  • Projected sales: $371 million

Cramer said he’s keeping an eye out for an update on Zendesk’s pursuit of Momentive Global, a deal which activist investor Jana Partners has urged Zendesk to drop.

Friday: Under Armour, Cleveland-Cliffs and Goodyear Tire & Rubber

Under Armour

  • Q4 earnings release before the open; conference call at 8:30 a.m. ET
  • Projected EPS: 6 cents
  • Projected sales: $1.47 billion

“There’s lots of good buzz about this one, so much that I think it’s actually a terrific speculation going into the quarter. We keep hearing about a potential turnaround, maybe this time it’s going to happen,” Cramer said.

Cleveland-Cliffs

  • Q4 earnings before the bell; conference call at 10 a.m. ET
  • Projected EPS: $2.15
  • Projected revenue: $5.73 billion

“I’m betting actually that Cleveland-Cliffs will do a decent number,” Cramer said, complimenting the company’s management and improved balance sheet.

Goodyear Tire & Rubber

  • Q4 earnings before the open; conference call at 9 a.m. ET
  • Projected EPS: 32 cents
  • Projected sales: $5.01 billion

“I think that Goodyear will positively dazzle,” Cramer said.

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