Insurer Centene Reaffirms Annual Profit Guidance, Reports Better Than Expected Q1 Earnings

Centene Corporation CNC reported on Friday that its first-quarter 2025 sales were $46.62 billion, up 15% year-over-year, beating the consensus of $43.36 billion.

The insurance firm reported adjusted EPS of $2.90, up 28%, beating the consensus of $2.54.

For the first quarter of 2025, premium and service revenues increased 17% to $42.5 billion from $36.3 billion a year ago, primarily driven by premium and membership growth in the PDP business, strong product positioning, and overall market growth in the Marketplace business.

The health benefits ratio (HBR) of 87.5% for the first quarter of 2025 represents an increase from 87.1% a year ago due to higher Medicaid HBR due to influenza-and-like illnesses.

• The company adds that the Medicaid HBR in the first quarter of 2024 was not meaningfully impacted by the redetermination-related acuity pressure, which escalated in the second quarter of 2024.
• The increase in HBR was partially offset by a decrease in Medicare due to program changes in the Part D business due to the Inflation Reduction Act compared to the first quarter of 2024 and the resulting change in the quarterly progression of the Medicare segment HBR.
• Total membership reached 27.94 million, down from 28.42 million a year ago.
• Medicaid membership fell from 13.29 million to 12.96 million.
• The company saw membership increases of 29% in Marketplace to 5.63 million and 22% in Medicare Prescription Drug Plan (PDP) to 7.87 million compared to the first quarter of 2024.

Centene CEO Sarah London noted that the company’s full-year 2025 adjusted diluted earnings per share outlook was greater than $7.25.

Guidance: Centene raised its 2025 premium and service revenue guidance window by $6 billion on Friday. The company now expects 2025 premium and service revenue of $164 billion to $166 billion compared to $158 billion-$160 billion expected earlier, including:

• $5 billion of additional Marketplace premium revenue due to outperformance in enrollment throughout the first quarter.
• Outperformance in the Medicare Advantage annual enrollment period resulting in $1.0 billion of additional premium revenue.

Centene reaffirms fiscal year 2025 adjusted EPS of greater than $7.25 compared to consensus of $7.23.

Price Action: Centene stock is down 1.19% at $60.85 during the premarket session at the last check Friday.

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