Centene (CNC) came out with quarterly earnings of $0.5 per share, beating the Zacks Consensus Estimate of a loss of $0.21 per share. This compares to earnings of $1.62 per share a year ago.
Health insurer Centene reported a $6.6 billion third-quarter loss as the company struggles to control rising healthcare costs in the government-subsidized health plans it administers and sells.
Centene swung to a third-quarter loss as enrollees in Affordable Care Act plans sought out more costly medical care, the latest evidence of health insurers' struggles to regain their former profitability.
Centene's health benefits ratio increases to 92.7% in the quarter from 89.2% in the same period last year.
CNC braces for Q3 results as revenue growth may be offset by rising medical costs and shrinking Medicaid memberships.
Centene Corporation faces high costs and near-term profitability challenges, but offers significant long-term upside if margins recover. CNC's Q3 earnings are expected to be volatile, with revenue likely beating estimates but bottom-line results remaining pressured by cost headwinds. The company can potentially restore profitability by adjusting premiums over time, though margin recovery is expected to be gradual, not immediate.
While the broader S&P 500 has enjoyed a resilient 2025 with consistent record highs, some individual names have suffered heavy losses.
U.S. equities gained at midday, with the S&P 500 and Nasdaq adding to Wednesday's latest closing record highs, as new inflation and unemployment reports boosted confidence the Federal Reserve will cut interest rates next week. The Dow Jones Industrial Average was more than 1% higher.
Centene's growth hinges on government contracts and strategic partnerships, but shares have plunged over 52% this year.
Centene's stock is deeply undervalued after a 60% drop, with key valuation multiples 50%-70% below historical averages. Despite 2025 headwinds and EPS guidance cuts, Centene remains profitable, well-diversified, and financially stable with strong liquidity. Long-term demographic trends and Centene's history of resilience support a sharp EPS rebound in 2026 and 2027.
CNC's rising HBR, driven by higher medical costs and policy shifts, pressures margins as it leans on scale and efficiency for stability.
Centene's growing membership base boosts revenue scale and operational efficiency, even as medical inflation puts pressure on margins.