Key Highlights

  • Adjusted EPS was $0.58, up from $0.50, while GAAP EPS was a loss of $0.14.
  • Total revenues were $50,647 million, up about 1.9% from $49,690 million.
  • The consolidated health benefits ratio was 92.7%, flat with a year earlier.
  • 2026 adjusted EPS guidance is above $5.20, a $0.40 increase.
  • Marketplace membership fell to 3,403,300 from 5,828,100 a year earlier.

Centene Earnings: How Did $0.58 Translate Into a Higher 2026 Outlook?

Centene (NYSE:CNC) reported third-quarter results on Tuesday, October 27, with adjusted diluted EPS of $0.58 against $0.50 a year earlier. As screened, the estimate was $0.10. GAAP diluted EPS was a loss of $0.14, compared with a loss of $13.50, which included a $6,723 million goodwill impairment.

Management raised 2026 adjusted EPS guidance to above $5.20, an increase of $0.40, and set GAAP EPS above $3.46. Revenue guidance is $196.5 billion to $200.5 billion. Nine-month adjusted EPS was $6.45 against $3.26. Premium and service revenues were $45,105 million, up 0.5%, and premium tax revenue was $5,542 million against $4,792 million. Guidance also assumes diluted shares of 497 million to 500 million and interest expense of $600 million to $620 million.

The chief executive said the earnings recovery has come faster than previously anticipated, driven by core business fundamentals.

Revenue and Medical Costs: What Held the 92.7% Ratio Steady?

Total revenues rose to $50,647 million. Medicaid revenue was $24,039 million, up 4%, and Medicare was $11,263 million, up 20%. Commercial fell 21% to $8,700 million.

The consolidated health benefits ratio was 92.7%, flat with last year. Medicaid was 93.6% against 93.4%, Commercial improved to 89.0% from 89.9% and Medicare to 93.8% from 94.3%. Management said lower Marketplace costs and stronger Medicare Advantage and Part D results offset a prior-year premium deficiency reserve benefit.

Full-year health benefits ratio guidance is 90.4% to 91.1%. The nine-month ratio was 89.9%, against 91.1%. Medical claims liabilities were $21.5 billion, up from $20.5 billion at year-end 2025, and days in claims payable were 48, up one day from the second quarter.

Marketplace and Cost Discipline: Why Did Adjusted SG&A Fall to 6.5%?

The adjusted SG&A ratio was 6.5% against 7.0%, with adjusted expenses of $2,924 million against $3,134 million. Management credited cost management, expense leverage, the shift away from Marketplace and growth in prescription drug plan business, which carries a lower ratio. GAAP SG&A was 7.2%, lifted by severance and vendor costs.

Marketplace enrollment fell about 42% to 3,403,300. Total at-risk membership was 25,698,200 against 27,968,100, and employees numbered 53,900 against 60,900. Medicaid membership was 11,895,900 and Part D membership 8,947,200.

Management tied the improved Marketplace ratio to better pricing and risk transfer reflecting member acuity.

Debt and Cash: What to Watch After the Outlook Raise?

Operating cash flow was negative $3,669 million in the quarter on timing of pass-through and premium payments that management said it expected, and $4,287 million over nine months. Debt-to-capitalization was 41.1% against 45.5%, with $558 million of senior notes repurchased in the quarter and $569 million more in October. The repurchase authorization was increased by $2.0 billion, with about $1.9 billion available. Cash, investments and restricted deposits were $39.9 billion, the $4.0 billion revolver was undrawn, and parent cash was $175 million. Guidance includes $355 million to $405 million of severance and contract exit costs. The release gave no quantitative 2027 outlook.