Centene Corp Withdraws 2025 Earnings Guidance

By Bobby Samwell • Wednesday, July 02 12:02 • Permanent Link

Centene Corporation (NYSE: CNC) has announced the withdrawal of its previous 2025 GAAP and adjusted diluted earnings per share (EPS) guidance. The company recently received and analyzed its first view of 2025 industry health insurance marketplace (marketplace) data, which has led to significant changes in its expectations.

Based on the preliminary interpretation of the data and discussions with an independent actuarial firm, Wakely, Centene has noted that the overall market growth in 22 states is lower than expected. The implied aggregate market morbidity in those states is significantly higher than the company's assumptions, resulting in a reduction of its previous full-year net risk adjustment revenue transfer expectation by approximately $1.8 billion, with an adjusted diluted EPS impact of approximately $2.75.

The company anticipates an additional reduction to its net risk adjustment revenue transfer expectation for its remaining seven marketplace states due to the observed morbidity trends. As a result, Centene has commenced the process of refiling 2026 marketplace rates to reflect a higher projected baseline of marketplace morbidity than previously expected.

In terms of the Medicaid business, Centene has experienced a step-up in medical cost trend, particularly in areas such as behavioral health, home health, and high-cost drugs. This has led the company to expect a higher Medicaid health benefits ratio for the second quarter of 2025 compared to the first quarter.

On a positive note, the company's Medicare Advantage and Medicare Prescription Drug Plan businesses are performing better than expected in the second quarter of 2025. Additionally, Centene continues to drive strong selling, general, and administrative expense leverage on its consolidated premium and service revenue growth.

Centene is in the process of closing the second quarter and analyzing data, including in the marketplace and Medicaid, and expects to report the second quarter 2025 results and provide additional insights on July 25, 2025.

Today the company's shares have moved 4.37% to a price of $56.65. Check out the company's full 8-K submission here.

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