Centene Earnings Beat, Guidance Raised

Centene Corporation (CNC) reported stronger-than-expected profitability for first-quarter 2026 on April 28, 2026, and raised its full-year outlook, citing cost controls, Medicaid medical-cost management, and Medicare Prescription Drug Plan (PDP) growth.

Quarterly Results and Profitability

Centene said in a press release that adjusted diluted earnings per share (EPS) for the quarter ended March 31, 2026, was $3.37, up from $2.90 a year earlier. GAAP diluted EPS rose to $3.11 from $2.63, while net earnings increased to $1.5 billion from $1.3 billion.

Total revenues reached $49.9 billion, a 7.1% increase year over year. Premium and service revenues grew 5.0% to $44.7 billion, driven by premium yield, Medicaid rate increases, state-directed payments, and Medicare PDP membership growth. These gains were partly offset by declines in Marketplace and Medicaid enrollment.

The company reported a health benefits ratio (HBR) of 87.3%, improving 20 basis points year over year. Medicaid HBR was 93.1%, reflecting progress in medical-cost management and moderate flu activity. Medicare HBR stood at 84.9%, and commercial HBR was 75.3%, affected by higher acuity in the Marketplace Silver tier and a pending 2026 risk-adjustment benefit.

Adjusted selling, general, and administrative (SG&A) expenses accounted for 7.6% of revenues, reflecting cost management, revenue leverage, reduced Marketplace membership, and PDP growth.

Guidance and Capital Position

Centene raised its full-year 2026 guidance in an 8-K filing to total revenues between $187.5 billion and $191.5 billion, and premium and service revenues between $171.0 billion and $175.0 billion. It also increased GAAP diluted EPS guidance to above $2.37 and adjusted diluted EPS guidance to above $3.40. The company attributed the raise to ongoing cost controls, Medicaid medical-cost management, and Medicare PDP performance, supported by strong first-quarter results.

Operating cash flow reached $4.4 billion, driven by net earnings, a partial sale of 2025 Centers for Medicare & Medicaid Services (CMS) PDP receivables, and payment timing. This was partly offset by 2026 PDP receivables and state premium payments collected in April.

Centene repurchased $1.0 billion of senior notes during the quarter, reducing total debt to $16.4 billion and lowering the debt-to-capitalization ratio to 43.2%.

Membership declined in Marketplace and Medicaid segments but grew in Medicare PDP. Management said these enrollment shifts weighed on premium yields but contributed to revenue leverage and SG&A efficiency.