Centene evaluating real estate portfolio as part of value creation plan

As part of its extensive value creation plan, Centene is taking a hard look at its real estate portfolio, executives said Tuesday on the company's earnings call.

Sarah London, vice chairman of Centene, said that the insurer has so far evaluated about 25% of the portfolio and is already finding potential areas for a "material downsizing" of its footprint. The shift toward remote work under the pandemic has enabled Centene to make these potential changes to its real estate portfolio, she said.

Taking a look at its real estate footprint is part of the company's broader and recently launched value creation plan. Other projects under this initiative include combining disparate pharmacy benefit management platforms into one and taking a critical look at non-core businesses.

For example, Centene announced in November that it will divest its majority stake in U.S. Medical Management.

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"While the value-creation work is critically important it is also complex," London said. "Let me assure you that we have full organizational commitment to our value creation objectives."

Centene Corporation brought in $599 million in profit for the fourth quarter of 2021 after posting a loss in the fourth quarter of 2020.

The results surpassed Wall Street analysts' projections, according to Zacks Investment Research. The government insurance giant fell short of analysts' estimates on revenue for the quarter, however, reporting $32.6 billion.

For full-year 2021, Centene brought in $126 billion in revenue and $1.3 billion in profit, according to the company's earnings report released Tuesday. For comparison, the company reported $111.1 billion in revenue and $1.8 billion in profit for 2020.

"We ended 2021 with strong fourth-quarter results at the high end of our previously provided earnings guidance range. Our portfolio is performing well as we executed across our three major product lines, building on our strong foundation and extending our market-leading position in government-sponsored healthcare," said Michael Neidorff, CEO of Centene, in a statement.

RELATED: Centene completes acquisition of Magellan Health

"As we look ahead, we are focused on advancing initiatives across the enterprise to deliver on our value creation goals and 2022 operational objectives," Neidorff added.

Membership at the end of 2021 was 26.6 million, up 1.1 million or 4% from the end of 2020.

The earnings report acknowledges the ongoing executive search for a new CEO, as Neidorff plans to retire this year, but does not offer an update on the status of a successor.

For 2022, the company expects revenues of between $135.9 billion and $137.9 billion and earnings per share of between $5.30 and $5.50. The projections reflect about $25 million in costs related to its acquisition of Magellan Health, which closed in January.