Centene Posts Rare Earnings Miss, Sets Outlook Below Consensus

Centene, a Medicaid-driven managed care firm, reported Q2 2025 earnings that missed expectations, resulting in a 10% drop in its shares. The firm's first quarterly earnings miss in its history was attributed to lower-than-expected operating earnings. Centene set its outlook below consensus, which further contributed to the decline in its stock price.

Centene Corporation (NYSE:CNC), a Medicaid-driven managed care firm, reported its Q2 2025 earnings, which fell short of market expectations, leading to a significant 10% drop in its stock price. The company's first-ever quarterly earnings miss was attributed to lower-than-expected operating earnings [1].

Centene's Q2 2025 financial results highlighted several key points. The company reported revenue of $48.74 billion, surpassing analyst estimates by 22.4% year-on-year. However, the non-GAAP loss of $0.16 per share was significantly below the analysts' consensus estimates of $0.23. The adjusted EBITDA also missed expectations, coming in at -$282 million compared to the analysts' estimate of $91.23 million [1].

The company's CEO, Sarah M. London, expressed disappointment with the results, stating that the company is addressing the issues with urgency and focus to restore its earnings trajectory [1]. Despite the earnings miss, Centene's long-term performance has been solid, with a 14.2% compounded annual growth rate over the last five years, beating the average healthcare company [1].

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration from the previous two years. This projection suggests that Centene's products and services may face some demand headwinds. However, the company is tracking well in other measures of financial health, such as operating margin and free cash flow margin [1].

Centene's stock has lost about 55.8% since the beginning of the year, underperforming the S&P 500's gain of 8.2%. The company's earnings outlook is also unfavorable, with the Zacks Rank indicating a "Strong Sell" rating for the stock [2]. The current consensus EPS estimate for the coming quarter is $0.65 on $44.38 billion in revenues, and for the current fiscal year, it is $3.55 on $178.78 billion in revenues [2].

Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock. UnitedHealth Group (UNH), another stock in the same industry, is expected to post quarterly earnings of $4.84 per share in its upcoming report, which represents a year-over-year change of -28.8% [2].

References:
[1] https://finance.yahoo.com/news/centene-nyse-cnc-q2-sales-101828035.html
[2] https://www.nasdaq.com/articles/centene-cnc-reports-q2-loss-tops-revenue-estimates