ST. LOUIS – October 29, 2026 -- Centene Corporation raised its 2026 adjusted diluted EPS guidance floor by $0.40 to greater than $5.20, after third-quarter adjusted diluted EPS of $0.58 and a GAAP diluted loss of $0.14 per share. The insurer also lifted its GAAP diluted EPS guidance floor to greater than $3.46.
CEO Sarah M. London said the company's core businesses produced a "faster recovery" in its earnings trajectory than previously anticipated.
Medicare outperformance narrows the full-year HBR range to 90.4%-91.1%
The consolidated health benefits ratio (HBR) was 92.7% in the third quarter, unchanged from a year earlier and better than the company expected. Medicare drove the outperformance, while Medicaid and Marketplace are on track. Centene cut its full-year HBR guidance range to 90.4%-91.1%, improving the midpoint by 15 basis points to 90.75%.
A lower Marketplace HBR, helped by improved pricing and risk transfer, and strong Medicare Advantage and PDP performance supported the quarter. The 2025 comparison period had benefited from a decrease in the Medicare Advantage premium deficiency reserve. No such reserve applied in 2026 as the business progressed toward profitability.
Premium and service revenues rise 0.5% to $45.1 billion
Revenue growth came from PDP premium yield and membership gains, Marketplace and Medicaid rate increases, Marketplace risk adjustment transfers for the 2026 benefit year, and state directed payments. Lower Marketplace and Medicaid membership partly offset those gains. The prior-year figure was $44.9 billion.
The adjusted SG&A expense ratio fell to 6.5% from 7.0%, helped by cost management, higher revenues and a smaller Marketplace book, which carries a meaningfully higher SG&A ratio. The GAAP SG&A ratio rose to 7.2% from 7.0% on enterprise optimization severance and vendor costs.
The GAAP effective tax rate was 46.7%, against 0.6% a year earlier. The adjusted effective tax rate was 14.5%, against 2.5%.
Centene retires $1.1 billion of debt since June 30 and fully redeems 2027 notes
The company repurchased $558 million of par value senior notes due 2027 and 2028 in the third quarter. Total debt then stood at $15.5 billion, with no borrowings on the $4.0 billion revolving credit facility. In October, Centene raised its debt repurchase program by $2.0 billion and bought back the remaining $569 million of 2027 Senior Notes. As of Oct. 27, $1.9 billion remained available under the program.
Operations used $3.7 billion of cash in the quarter, which Centene attributed to the expected timing of pass-through, premium and other payments. At Sept. 30, the company held $39.9 billion in cash, investments and restricted deposits, including $175 million of cash available for general corporate use. Medical claims liabilities were $21.5 billion, and days in claims payable were 48, up one day from the second quarter.
Centene also set its 2026 interest expense guidance range at $600 million to $620 million.