Centene Lifts 2026 Outlook as Insurer Contains Medical Costs -- 2nd Update

By Adriano Marchese

Centene lifted its guidance for the year buoyed by better medical cost control along with strength in its core government-sponsored and individual healthcare lines.

The health insurance company on Tuesday said it now expects revenue of $193.5 billion to $197.5 billion for the year. Analysts expect $191.16 billion, according to FactSet. The company said its higher forecast was driven largely by premium tax revenue, as well as its Marketplace and Medicaid businesses.

Centene said it also anticipates premium and service revenues for the year at $173 billion to $177 billion.

At the same time, the company said its guidance floor was lifted to greater than $3.11 and its adjusted diluted EPS guidance floor to more than $4.80.

Centene's health benefits ratio, a key insurance metric showing the percentage of premium revenue spent on paying medical claims, topped expectations at 89.6%, down from 93% a year earlier. A lower ratio is better for profits. Analysts polled on FactSet were expecting 91%.

The insurer said its ratio decreased due to rate and revenue increases and continued tangible progress in managing medical costs in the Medicaid business.

Shares recently were up 2.1% at $65.45 in premarket trading.

For the second quarter, total at-risk membership fell 7.6% year-over-year to 25.89 million as of June 30, driven by notable declines in its core business lines.

Commercial Marketplace enrollees dropped to 3.5 million from 5.9 million a year earlier, while total Medicaid membership fell 5.5% to 12.1 million. These losses were partially offset by growth in its Medicare Prescription Drug Plan segment, which grew 12% to 8.8 million members.

For the quarter, Centene posted a net income of $1.09 billion, or $2.19 a share, compared with a loss of $253 million, or 51 cents a share, in the same quarter a year ago.

On an adjusted basis, which excludes one-off costs and exceptional items, earnings came to $2.51 a share. According to FactSet, analysts were expecting $1.08 a share.

Total revenues rose to $53.58 billion from $48.74 billion. Analysts expected a slight decline to $47.64 billion.

Premium and service revenues were $44.38 billion, compared with $42.47 billion, largely due to a 5% increase in Medicaid revenue, its largest contributor, and a 17% increase in Medicare.

Write to Adriano Marchese at adriano.marchese@wsj.com

(END) Dow Jones Newswires

July 28, 2026 08:13 ET (12:13 GMT)