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Centene Incurs Q4 Loss, Revenues Up YoY due to PDP Business Strength
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Key Takeaways
Centene incurred a Q4 adjusted loss of $1.19 per share despite revenues rising 21.9% year over year.
CNC revenues rose on higher premiums and membership in PDP and Marketplace businesses.
Centene saw membership fall 3.4% and medical costs surge, pushing the health benefits ratio to 94.3%.
Centene Corporation (CNC - Free Report) incurred a fourth-quarter 2025 adjusted loss per share of $1.19, narrower than the Zacks Consensus Estimate of a loss of $1.25 per share. Adjusted earnings of 80 cents per share were reported in the prior-year quarter.
Revenues totaled $49.7 billion, which rose 21.9% year over year. The top line surpassed the consensus mark by 3.1%.
The quarterly results benefited from solid revenue growth, driven by strong premium revenues in Medicaid, Medicare and Commercial businesses, particularly from increased premiums and membership in the PDP and Marketplace businesses. However, the upside was partly offset by a decline in total membership and a sharp increase in medical costs.
Centene Corporation Price, Consensus and EPS Surprise
Revenues from Medicaid advanced 11% year over year to $23 billion, while Medicare revenues of $9.6 billion soared 75% year over year in the quarter under review. Meanwhile, commercial revenues came in at $10.8 billion, up 24% year over year.
Centene's premium of $44 billion grew 23.8% year over year on the back of higher premiums and membership in the PDP business, strength in the Marketplace business and Medicaid rate hikes. The metric beat the Zacks Consensus Estimate of $43.5 billion.
Service revenues slid 3.6% year over year to $749 million in the fourth quarter, lower than the consensus mark of $757 million. Investment and other income of $369 million improved 7.3% year over year and outpaced the Zacks Consensus Estimate of $341 million.
Total membership was 27.6 million as of Dec. 31, 2025, which declined 3.4% year over year, due to membership declines in the Medicaid and Medicare businesses. The metric missed the consensus mark of 27.9 million.
Centene’s health benefits ratio deteriorated 470 basis points year over year to 94.3% in the quarter under review. Operating expenses totaled $51.5 billion, which increased 26.7% year over year due to higher medical costs, selling, general and administrative expenses, and premium tax expense. Medical costs alone escalated 30.4% year over year.
The company incurred an adjusted net loss of $583 million against the year-ago quarter’s earnings of $404 million.
CNC’s Financial Update (As of Dec. 31, 2025)
Centene exited the fourth quarter with cash and cash equivalents of $17.9 billion, which rose 27.2% from the 2024-end level. Total assets of $76.7 billion declined 6.9% from the figure at 2024-end.
Long-term debt amounted to $17.4 billion, down 5.8% from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $50 million.
Total stockholders’ equity of $20 billion dropped 24.4% from the 2024-end figure.
Centene generated $5.1 billion of net cash from operations in 2025, which increased more than 33-fold from the 2024 figure.
Centene’s Share Repurchase Update
Centene bought back common shares worth $475 million in 2025.
Full-Year Update
Total revenues of $194.8 billion advanced 19.4% from the 2024 level, while adjusted EPS tumbled 71% year over year to $2.08 in 2025. Premium and service revenues came in at $174.6 billion, up 20% year over year.
CNC’s 2026 Guidance
Management anticipates premium and service revenues within the band of $170-$174 billion for 2026, the midpoint of which indicates a decline of 1.5% from the 2025 reported figure.
Revenues are estimated between $186.5 billion and $190.5 billion, the midpoint of which implies 3.2% fall from the 2025 figure.
Adjusted EPS is expected to be greater than $3.00, which indicates a 44.2% surge from the 2025 figure. GAAP EPS is forecasted to remain greater than $1.98.
HBR is estimated to be in the band of 90.9-91.7% for 2026, while the adjusted SG&A expense ratio is expected to be 7.1-7.7%. Adjusted effective tax rate is anticipated to be in the range of 26-27%.
Shares outstanding are anticipated to be between 495.6 million and 498.6 million.
Of the Medical sector players that have reported fourth-quarter 2025 results so far, the bottom-line results of HCA Healthcare, Inc. (HCA - Free Report) , Elevance Health, Inc. (ELV - Free Report) and The Cigna Group (CI - Free Report) beat the respective Zacks Consensus Estimate.
HCA Healthcare reported fourth-quarter 2025 adjusted earnings per share (EPS) of $8.01, which outpaced the Zacks Consensus Estimate by 8.8%. The bottom line advanced 28.8% year over year. Revenues rose 6.7% year over year to $19.5 billion. However, the top line lagged the consensus mark by 0.6%. Same-facility equivalent admissions grew 2.5% year over year in the fourth quarter. Meanwhile, same-facility admissions advanced 2.4%.
Same-facility revenue per equivalent admission rose 2.9% year over year. Same-facility inpatient surgeries remained unchanged year over year, while same-facility outpatient surgeries dipped 0.5%. Additionally, same-facility emergency room visits inched up 0.5% year over year in the quarter under review. Adjusted EBITDA of $4.1 billion advanced 10.8% year over year, which surpassed our estimate of $3.9 billion. HCA Healthcare operated 190 hospitals and roughly 2,500 ambulatory sites of care across 19 states and the United Kingdom as of Dec. 31, 2025.
Elevance Health’s fourth-quarter 2025 adjusted EPS of $3.33 surpassed the Zacks Consensus Estimate by 7.3%. The bottom line rose 3.1% year over year. Operating revenues advanced 9.6% year over year to $49.3 billion. However, the top line missed the consensus mark by 0.5%. Medical membership of Elevance Health was around 45.2 million as of Dec. 31, 2025, which dipped 1.1% year over year. Premiums totaled $40.7 billion in the quarter under review, which improved 12.3% year over year.
Product revenues fell 3.8% year over year to $6.5 billion. Net investment income declined 6.5% year over year to $493 million. Adjusted operating margin of 0.8% deteriorated 110 basis points (bps) year over year. The Health Benefits unit recorded operating revenues of $41.8 billion in the fourth quarter, which rose 11% year over year. The unit incurred an operating loss of $220 million against the prior-year quarter’s gain of $207 million. The Carelon segment’s operating revenues rose 27% year over year to $18.7 billion in the quarter under review.
Cigna reported fourth-quarter 2025 adjusted EPS of $8.08, which beat the Zacks Consensus Estimate by 2.7%. The bottom line advanced 22% year over year. Adjusted revenues of $72.5 billion rose 10% year over year. The top line beat the consensus mark by 3.7%. Cigna’s medical customer base came in at 18.1 million as of Dec. 31, 2025, which declined 5.4% year over year. The adjusted SG&A expense ratio of 4.7% improved 100 basis points (bps) year over year.
Adjusted income from operations totaled $2.1 billion, which rose 16% year over year. The Evernorth Health Services unit recorded revenues of $63.1 billion in the fourth quarter, which advanced 17% year over year. Adjusted operating income, on a pre-tax basis, rose 2% year over year to $2.2 billion. The Cigna Healthcare segment’s revenues of $11.1 billion tumbled 16% year over year. MCR came in at 88% at the fourth-quarter end, which deteriorated 10 bps year over year.
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Centene Incurs Q4 Loss, Revenues Up YoY due to PDP Business Strength
Key Takeaways
Centene Corporation (CNC - Free Report) incurred a fourth-quarter 2025 adjusted loss per share of $1.19, narrower than the Zacks Consensus Estimate of a loss of $1.25 per share. Adjusted earnings of 80 cents per share were reported in the prior-year quarter.
Revenues totaled $49.7 billion, which rose 21.9% year over year. The top line surpassed the consensus mark by 3.1%.
The quarterly results benefited from solid revenue growth, driven by strong premium revenues in Medicaid, Medicare and Commercial businesses, particularly from increased premiums and membership in the PDP and Marketplace businesses. However, the upside was partly offset by a decline in total membership and a sharp increase in medical costs.
Centene Corporation Price, Consensus and EPS Surprise
Centene Corporation price-consensus-eps-surprise-chart | Centene Corporation Quote
Quarterly Operational Update of CNC
Revenues from Medicaid advanced 11% year over year to $23 billion, while Medicare revenues of $9.6 billion soared 75% year over year in the quarter under review. Meanwhile, commercial revenues came in at $10.8 billion, up 24% year over year.
Centene's premium of $44 billion grew 23.8% year over year on the back of higher premiums and membership in the PDP business, strength in the Marketplace business and Medicaid rate hikes. The metric beat the Zacks Consensus Estimate of $43.5 billion.
Service revenues slid 3.6% year over year to $749 million in the fourth quarter, lower than the consensus mark of $757 million. Investment and other income of $369 million improved 7.3% year over year and outpaced the Zacks Consensus Estimate of $341 million.
Total membership was 27.6 million as of Dec. 31, 2025, which declined 3.4% year over year, due to membership declines in the Medicaid and Medicare businesses. The metric missed the consensus mark of 27.9 million.
Centene’s health benefits ratio deteriorated 470 basis points year over year to 94.3% in the quarter under review. Operating expenses totaled $51.5 billion, which increased 26.7% year over year due to higher medical costs, selling, general and administrative expenses, and premium tax expense. Medical costs alone escalated 30.4% year over year.
The company incurred an adjusted net loss of $583 million against the year-ago quarter’s earnings of $404 million.
CNC’s Financial Update (As of Dec. 31, 2025)
Centene exited the fourth quarter with cash and cash equivalents of $17.9 billion, which rose 27.2% from the 2024-end level. Total assets of $76.7 billion declined 6.9% from the figure at 2024-end.
Long-term debt amounted to $17.4 billion, down 5.8% from the figure as of Dec. 31, 2024. The current portion of long-term debt totaled $50 million.
Total stockholders’ equity of $20 billion dropped 24.4% from the 2024-end figure.
Centene generated $5.1 billion of net cash from operations in 2025, which increased more than 33-fold from the 2024 figure.
Centene’s Share Repurchase Update
Centene bought back common shares worth $475 million in 2025.
Full-Year Update
Total revenues of $194.8 billion advanced 19.4% from the 2024 level, while adjusted EPS tumbled 71% year over year to $2.08 in 2025. Premium and service revenues came in at $174.6 billion, up 20% year over year.
CNC’s 2026 Guidance
Management anticipates premium and service revenues within the band of $170-$174 billion for 2026, the midpoint of which indicates a decline of 1.5% from the 2025 reported figure.
Revenues are estimated between $186.5 billion and $190.5 billion, the midpoint of which implies 3.2% fall from the 2025 figure.
Adjusted EPS is expected to be greater than $3.00, which indicates a 44.2% surge from the 2025 figure. GAAP EPS is forecasted to remain greater than $1.98.
HBR is estimated to be in the band of 90.9-91.7% for 2026, while the adjusted SG&A expense ratio is expected to be 7.1-7.7%. Adjusted effective tax rate is anticipated to be in the range of 26-27%.
Shares outstanding are anticipated to be between 495.6 million and 498.6 million.
CNC’s Zacks Rank
Centene currently has a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported fourth-quarter 2025 results so far, the bottom-line results of HCA Healthcare, Inc. (HCA - Free Report) , Elevance Health, Inc. (ELV - Free Report) and The Cigna Group (CI - Free Report) beat the respective Zacks Consensus Estimate.
HCA Healthcare reported fourth-quarter 2025 adjusted earnings per share (EPS) of $8.01, which outpaced the Zacks Consensus Estimate by 8.8%. The bottom line advanced 28.8% year over year. Revenues rose 6.7% year over year to $19.5 billion. However, the top line lagged the consensus mark by 0.6%. Same-facility equivalent admissions grew 2.5% year over year in the fourth quarter. Meanwhile, same-facility admissions advanced 2.4%.
Same-facility revenue per equivalent admission rose 2.9% year over year. Same-facility inpatient surgeries remained unchanged year over year, while same-facility outpatient surgeries dipped 0.5%. Additionally, same-facility emergency room visits inched up 0.5% year over year in the quarter under review. Adjusted EBITDA of $4.1 billion advanced 10.8% year over year, which surpassed our estimate of $3.9 billion. HCA Healthcare operated 190 hospitals and roughly 2,500 ambulatory sites of care across 19 states and the United Kingdom as of Dec. 31, 2025.
Elevance Health’s fourth-quarter 2025 adjusted EPS of $3.33 surpassed the Zacks Consensus Estimate by 7.3%. The bottom line rose 3.1% year over year. Operating revenues advanced 9.6% year over year to $49.3 billion. However, the top line missed the consensus mark by 0.5%. Medical membership of Elevance Health was around 45.2 million as of Dec. 31, 2025, which dipped 1.1% year over year. Premiums totaled $40.7 billion in the quarter under review, which improved 12.3% year over year.
Product revenues fell 3.8% year over year to $6.5 billion. Net investment income declined 6.5% year over year to $493 million. Adjusted operating margin of 0.8% deteriorated 110 basis points (bps) year over year. The Health Benefits unit recorded operating revenues of $41.8 billion in the fourth quarter, which rose 11% year over year. The unit incurred an operating loss of $220 million against the prior-year quarter’s gain of $207 million. The Carelon segment’s operating revenues rose 27% year over year to $18.7 billion in the quarter under review.
Cigna reported fourth-quarter 2025 adjusted EPS of $8.08, which beat the Zacks Consensus Estimate by 2.7%. The bottom line advanced 22% year over year. Adjusted revenues of $72.5 billion rose 10% year over year. The top line beat the consensus mark by 3.7%. Cigna’s medical customer base came in at 18.1 million as of Dec. 31, 2025, which declined 5.4% year over year. The adjusted SG&A expense ratio of 4.7% improved 100 basis points (bps) year over year.
Adjusted income from operations totaled $2.1 billion, which rose 16% year over year. The Evernorth Health Services unit recorded revenues of $63.1 billion in the fourth quarter, which advanced 17% year over year. Adjusted operating income, on a pre-tax basis, rose 2% year over year to $2.2 billion. The Cigna Healthcare segment’s revenues of $11.1 billion tumbled 16% year over year. MCR came in at 88% at the fourth-quarter end, which deteriorated 10 bps year over year.