Centene Earnings Show Q4 Loss, 2026 Profit Outlook

Centene Corporation (CNC) reported a fourth-quarter loss on Feb. 6, 2026, as rising medical claims in Medicaid and the individual marketplace pressured margins. Management said stabilizing Medicaid costs and a Marketplace margin recovery support a 2026 adjusted-profit outlook above analysts’ estimates.

Fourth-Quarter Results and Cost Pressures

Centene said in a Feb. 6 press release that fourth-quarter revenue reached $49.7 billion, with an adjusted diluted loss per share of $1.19, both modestly above consensus. On a GAAP basis, the company recorded a loss per share of $2.24, which included a $513 million impairment related to the pending Magellan Health divestiture and a $389 million after-tax charge. Centene signed a definitive agreement to sell the remaining Magellan businesses in December 2025.

The consolidated health-benefit ratio (HBR) rose to 94.3% in the quarter. Medicaid HBR improved to 93.0%, a 40-basis-point sequential gain and 190 basis points better than the midyear peak, while Medicaid membership declined to about 12.5 million. Management attributed roughly half of the excess medical trend to behavioral health costs, with home health services and a small number of very high-cost drugs as the next largest pressures. The quarter also included adjustments from a provider-contract review and higher cost accruals related to compliance with the No Surprises Act. A 2023 membership-revenue reconciliation with CMS completed in Q4 did not affect the 2026 outlook.

Marketplace medical costs came in slightly better than expected, and updated Wakely risk-adjustment data produced an estimated $200 million favorable impact on the fourth-quarter profit and loss. Marketplace membership is expected to be about 3.5 million at the end of the first quarter of 2026, with slight attrition thereafter.

2026 Guidance and Financial Position

Centene’s 2026 guidance calls for adjusted earnings per share above $3.00, representing more than 40% growth from 2025. The company projects premium and service revenue between $170 billion and $174 billion and a consolidated HBR range of 90.9% to 91.7%. The outlook assumes Medicaid net rates and trends in the mid-4% range, a Medicaid member-month decline of roughly 5% to 6%, and Marketplace membership near 3.5 million at the end of the first quarter. CEO Sarah London said on the earnings call, “We are confident in our ability to execute against the outlook we have provided today.”

Management expects most adjusted EPS to accrue in the first quarter, step down in the second quarter, approach break-even in the third quarter, and produce a loss in the fourth quarter due to Marketplace and Prescription Drug Plan (PDP) seasonality and benefit-design timing.

Centene closed 2025 with operating cash flow of $5.1 billion, cash and equivalents of $17.9 billion, and a debt-to-capital ratio of 46.5%. The guidance assumes no share repurchases, with any excess cash deployment to be considered opportunistically.

On the Medicare side, Centene reported post-open-enrollment Medicare Advantage membership of about 8.7 million and a PDP book of roughly 8.7 million members. The company expects approximately $7.5 billion of additional PDP revenue in 2026, driven mainly by premium-yield increases. Management reiterated its goal of driving Medicare Advantage to break-even in 2027 while intentionally reducing membership and increasing yields in the near term.

By linking its outlook to Medicaid stabilization and a Marketplace margin rebound, Centene has outlined a path to recover adjusted earnings power. The success of this recovery will depend on the company’s ability to control behavioral health and drug-cost trends that drove last year’s elevated medical expenses.