Revenue Analysis
Total and Operating Revenue: CNC’s total revenue has shown fluctuations with the highest recorded in Q4 2024 at $40.41 billion. The operating revenue peaked in Q4 2024 at $36.34 billion. There have been slight variances each quarter suggesting challenges in revenue growth consistency.
Gross Profit Margin: Gross profit margins have shown a consistent pattern, with a peak in Q4 2024 at $4.65 billion. The margins show an overall healthy distance from cost of revenue, indicating effective product pricing or cost management strategies.
Cost Management
Cost of Revenue: Costs of revenue have been high, reaching up to $35.76 billion in Q1 2024, reflecting significant operating expenses tied directly to producing goods/services.
Operating Expense and Total Expenses: Operating expenses were highest at $3.52 billion in Q1 2024. Total expenses peaked in Q4 2023 at $39.69 billion. These figures illustrate a substantial cost structure that needs strategic management to enhance profitability.
Profitability Analysis
EBITDA: EBITDA ranged from $522 million in Q4 2023 to $1.96 billion in Q1 2024, showing significant variability, which might reflect operational inefficiencies or variability in revenue generation.
Operating Income: Operating income also presented considerable fluctuation, with a high of $1.19 billion in Q1 2024, contrasting with a loss in Q4 2023. Monitoring these figures is crucial for understanding operational effectiveness.
Pretax Income and Net Income: Pretax income was highest at $1.47 billion in Q1 2024. Net income showed a high of $1.16 billion in the same period, indicative of strong earnings potential when operating efficiently.
Cash Flow Indicators
Reconciled Depreciation: Reconciled depreciation figures have been quite steady, suggesting consistent investment in capital assets which is depreciated over their useful lives.
Interest Expense: Interest expenses were constant around $178-$183 million, reflecting stable debt financing costs.
Taxation
Tax Rate: The tax rate has varied, touching a low of 0.188 in Q1 2023 to a high of 0.382 in Q3 2023. Such variations could impact net income considerations.
Tax Provision: Tax provisions ranged from a recharge of $15 million in Q4 2023 to a charge of $360 million in Q2 2023, affecting net income significantly.
Tax Effect of Unusual Items: Notable tax effects from unusual items were recorded, impacting the financial health visibility and net income reflections.
Shareholder Metrics
Diluted and Basic EPS: Earnings per Share (EPS) showed a high of $2.17 in Q1 2024 indicating strong profit distribution potential to shareholders. However, variability across quarters calls for cautious optimism.
Average Shares: The number of shares has remained fairly stable, suggesting no major equity dilutions or buybacks that could have influenced EPS significantly.
Net Income Available to Common Stockholders: Net income available to common stockholders reached a peak in Q1 2024 at $1.16 billion, highlighting periods of strong financial performance.
Conclusion
CNC’s financial performance exhibits robust potential but comes with variability in revenue and profitability metrics that suggest areas for strategic enhancements. Focusing on cost management, enhancing operational efficiencies, and leveraging periods of high profitability could be crucial for sustained growth. Continued attention to tax management and careful monitoring of financial health are recommended to ensure consistent shareholder value.