Latest news with #CenteneCorp
Mint
a day ago
- Business
- Mint
Centene Slashes 2025 Guidance and Posts Surprise Loss
(Bloomberg) -- Centene Corp. cut its annual guidance and reported a surprise quarterly loss Friday, yet another disappointment for the embattled health insurer that's been grappling with problems in its Affordable Care Act business. The company now expects adjusted earnings of $1.75 a share in 2025, far less than the more than $7.25 a share it projected earlier in the year. The figure could fall even further, to $1.25 a share, depending on the progress Centene makes in its Medicaid business. Centene had pulled its 2025 guidance earlier this month, citing precipitously rising risks in the ACA business. Since then, the company's struggles seem to have heightened. At the time it said insurance market trends that veered from its assumptions threatened $1.8 billion in revenue, while Friday it increased that figure to $2.4 billion based on more data. Shares dropped as much as 16% before markets opened in New York Friday though later pared losses. They had fallen 56% since the start of the year through Thursday's close. The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act, or ACA, business — the same reason it pulled its outlook earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than previously expected. For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share. 'We are disappointed by our second-quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement. In the second quarter, Centene spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number. The insurer said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs. Because of various government programs that are likely to reduce health care coverage, patients may be seeking more medical care now while they still can, boosting medical spending, the company said in a regulatory filing Friday. --With assistance from John Tozzi. (Updates with guidance starting in first paragraph.) More stories like this are available on
Mint
a day ago
- Business
- Mint
Centene Shares Drop After Insurer Reports Surprise Losses
(Bloomberg) -- Centene Corp. reported a surprise quarterly loss Friday, yet another disappointment for the embattled health insurer, which recently pulled its 2025 guidance citing problems in its Affordable Care Act business. Shares dropped 12.7% before markets opened in New York. They had fallen 56% since the start of the year. Centene said it would provide updated guidance on a conference call with analysts, which starts at 8 a.m. New York time, an unusual move given the insurer normally shares its outlook in earnings releases. 'Given how weak results were in the quarter, the lack of guidance in the release could mean that 2025 guidance is weaker than analysts had been projecting,' Morningstar analyst Julie Utterback said. After the earnings miss, Centene executives might want to 'hold investor hands through the rest of 2025 and beyond,' she said. The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act, or ACA, business — the same reason it pulled its outlook earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than previously expected. For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share. 'We are disappointed by our second-quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement. In the second quarter, Centene spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number. The insurer said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs. Because of various government programs that are likely to reduce health care coverage, patients may be seeking more medical care now while they still can, boosting medical spending, the company said in a regulatory filing Friday. --With assistance from John Tozzi. (Updates with analyst comment in third paragraph.) More stories like this are available on
Yahoo
3 days ago
- Business
- Yahoo
Centene Corp (CNC) Q2 2025 Earnings Call Highlights: Navigating Challenges and Strategizing for ...
Premium and Service Revenue: $42.5 billion for Q2 2025. Adjusted Diluted Loss Per Share: $0.16 for Q2 2025. Marketplace Membership: 5.9 million members. Commercial Premium and Service Revenue: Over $10 billion in Q2 2025. Marketplace Earnings Pressure: $2.4 billion full-year headwind expected for 2025. Medicaid Health Benefits Ratio (HBR): 94.9% for Q2 2025. Medicare PDP Membership: 7.8 million members. Full Year Adjusted Diluted EPS Forecast: Approximately $1.75 for 2025. Cash Flow from Operations: $1.8 billion for Q2 2025. Days in Claims Payable: 47 days at the end of Q2 2025. Full Year Premium and Service Revenue Outlook: Approximately $172 billion for 2025. Warning! GuruFocus has detected 6 Warning Signs with CNC. Release Date: July 25, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Centene Corp (NYSE:CNC) reported a significant increase in premium and service revenue, reaching $42.5 billion for the second quarter of 2025. The Medicare Advantage business is making important progress on its path to margin recovery, with effective 2025 pricing and operational discipline. Centene Corp (NYSE:CNC) has submitted 2026 pricing in 17 states and expects to submit adjusted pricing files in up to 12 additional states, aiming for profitability in 2026. The company is actively working on securing Medicaid rate increases, with a 5% composite rate adjustment expected for 2025, stronger than the previous expectation. Centene Corp (NYSE:CNC) is leveraging its size and scale to drive transparency and stability in the marketplace, engaging with the administration on program integrity measures. Negative Points Centene Corp (NYSE:CNC) reported an adjusted per share loss of $0.16 for the second quarter of 2025, falling short of financial goals. The marketplace business faced a $2.4 billion earnings pressure due to a change in risk adjustment transfer assumptions and higher utilization levels. The Medicaid portfolio produced an unanticipated health benefits ratio of 94.9%, driven by elevated medical cost trends in behavioral health, home health, and high-cost drugs. The company anticipates further attrition in marketplace membership, expecting to end the year with 5.4 million members, down from 5.9 million. Centene Corp (NYSE:CNC) faces challenges in repricing its marketplace business to account for morbidity shifts and program integrity impacts, with profitability not expected until 2026. Q & A Highlights Q: Can you walk us through your capital position and any potential needs for additional capital through the rest of the year? A: Andrew Asher, CFO, explained that Centene expects to inject a net $300 million into subsidiaries in the second half of the year. The company has a $4 billion credit facility with no current draw and a 60% debt-to-cap covenant, providing ample runway for capital needs. Q: Regarding the public exchanges, can you explain the risk adjustment true-up and your strategy for repricing in 2026? A: Sarah London, CEO, noted that the company underestimated the impact of program integrity measures, which led to a significant morbidity shift. For 2026, Centene aims to reprice 100% of its book to improve profitability, considering expected market dynamics and potential disenrollment. Q: Your guidance for Medicaid implies improvement in the second half. How does this compare to your peers, and what are the assumptions? A: Sarah London highlighted that Centene expects to improve Medicaid margins through focused interventions in specific states and leveraging enterprise-wide strategies. The company is confident in its ability to deliver meaningful margin improvement over the next four to six quarters. Q: Can you discuss the assumptions for ACA margins in 2026 and the potential range of outcomes? A: Sarah London stated that Centene aims to return to profitability in 2026 with meaningful margin improvement. The company is focused on margin over membership and will provide more clarity as they progress through rate filings and open enrollment. Q: How are you addressing the risk adjustment payable and product strategy for 2026 and beyond? A: Sarah London explained that Centene is considering market dynamics and potential product and network adjustments to optimize margins. The company is also advocating for greater transparency and earlier data availability to improve market stability. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
4 days ago
- Business
- Mint
Centene Earnings Fall Short of Expectations as Woes Mount
(Bloomberg) -- Centene Corp. reported a surprise quarterly loss Friday, yet another disappointment for the embattled health insurer, which recently pulled its 2025 guidance citing revenue pressure. Shares dropped 11% before markets opened in New York. They had fallen 56% since the start of the year. Centene said it would provide updated guidance on a conference call with analysts, which starts at 8 a.m. New York time. The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act business — the same reason it pulled guidance earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than it had previously expected. For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share. 'We are disappointed by our second quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement. In the second quarter, the company spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number. The company said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs. --With assistance from John Tozzi. (Updates with new information throughout.) More stories like this are available on
Bloomberg
5 days ago
- Business
- Bloomberg
Molina Drops After Lowering Guidance Twice in One Month
Molina Healthcare Inc. shares fell as much as 10% when markets opened Thursday after the US health insurer cut its outlook for the second time this month because of higher-than-expected medical costs. Several health insurance companies haven't done a good job of predicting medical costs recently, unsettling investors and driving down stock prices. Molina's shares hit their lowest level since September 2020. Centene Corp. and UnitedHealth Group Inc. both withdrew their forecasts earlier this year.
