Core Insights - Molina Healthcare, Inc. reported a fourth-quarter 2025 adjusted loss of $2.75 per share, significantly missing the Zacks Consensus Estimate of an adjusted EPS of 43 cents, compared to an EPS of $5.05 in the prior-year quarter [1][9] - Revenues for the quarter reached $11.4 billion, reflecting an 8.3% year-over-year increase and surpassing the consensus estimate by 5.3% [1][5] Financial Performance - For the full year 2025, Molina reported total revenues of $45.4 billion, up from $40.7 billion in 2024, exceeding the consensus estimate of $44.8 billion [5] - Adjusted EPS for 2025 declined to $11.03 from $22.65 in 2024 but still beat the consensus estimate of $10.65 [5] - Adjusted net income fell to $584 million from $1.3 billion a year ago [5] Operational Highlights - Premium revenues in Q4 totaled $10.7 billion, a 7.3% year-over-year increase, exceeding both the Zacks Consensus Estimate and internal estimates [6] - Total membership as of December 31, 2025, declined by 0.8% year over year to approximately 5.49 million, missing the Zacks Consensus Estimate of 5.52 million [6] - The medical care ratio (MCR) increased by 440 basis points year over year to 94.6%, exceeding both the consensus estimate and internal estimates [8] Expense and Income Analysis - Investment income decreased by 11.7% year over year to $98 million, below the consensus estimate of $100.1 million [7] - Total operating expenses rose by 14% year over year to $11.5 billion, exceeding internal estimates, primarily due to higher medical care costs and increased general and administrative expenses [7][8] - Interest expense grew by 52.9% year over year to $52 million [8] Future Guidance - For 2026, management expects premium revenues to decline by 2% year over year to $42.2 billion, with adjusted earnings projected to be at least $5.00 per share [12] - Adjusted net income is anticipated to be $256 million, with total membership estimated to decrease to 5.1 million by the end of 2026 [13]

Core Viewpoint - Elevance Health anticipates a slight decline in revenue for 2026 and projects full-year profit below Wall Street expectations, indicating ongoing challenges from elevated medical costs impacting insurers [1] Group 1: Financial Forecast - The company expects total operating revenue to decrease by a low-single-digit percentage in 2026, raising investor concerns following UnitedHealth's similar revenue decline announcement [3] - The forecast includes a low-double-digit decline in membership for certain plans, partially offset by increased premiums and growth in Carelon, its health services division [3] Group 2: Market Conditions - The outlook reflects continued pressure in the Medicaid sector, contributing to a negative market sentiment and stock selloff [4] - Health insurers are facing persistently high medical costs due to increased demand for behavioral health services and specialty drugs, which have elevated costs over the past two years [5] Group 3: Membership and Policy Changes - The company anticipates a sicker member pool in its Obamacare business due to the expiration of enhanced tax credits that previously supported plan purchases [6] - The expiration of these tax credits, which capped out-of-pocket premiums at 8.5% of income, is expected to lead to higher premiums for millions, potentially discouraging healthier individuals from enrolling [7] Group 4: Regulatory Impact - Shares of health insurers fell after the U.S. health insurance agency announced a rate increase of only 0.09% for Medicare Advantage plans, which was below expectations [8]

Core Viewpoint - Elevance Health has forecasted that its profit for 2026 will be below Wall Street expectations due to anticipated higher medical costs continuing into the year [1] Group 1: Financial Forecast - The company expects that elevated medical costs will persist, impacting profitability [1] - The profit forecast for 2026 is notably lower than what analysts had anticipated [1]

Core Viewpoint - UnitedHealth is experiencing a significant stock decline of approximately 20% following its warning of an expected annual revenue decrease for the first time in over 30 years, impacting its market value and the broader managed-care sector [1][2]. Financial Performance - The company reported fourth-quarter 2025 revenue of about $113.2 billion, reflecting a year-over-year increase of over 12%, but net income fell sharply to around $10 million, or 1 cent per share, due to $1.6 billion in after-tax restructuring charges [5]. - Adjusted earnings per share for the quarter were $2.11, aligning with forecasts but down significantly from $6.81 a year earlier, attributed to rising medical costs and other operational challenges [5]. Revenue Outlook - For full-year 2025, UnitedHealth anticipates revenue of approximately $447.6 billion, representing a 12% increase year-over-year, but projects a revenue decline of about 2% for 2026, with expectations of "greater than" $439 billion, falling short of analyst estimates of around $454 billion [2][3]. - The company aims for adjusted earnings per share of at least $17.75 for 2026, indicating high-single-digit profit growth despite the anticipated revenue dip [3]. Market Reaction - The stock market response was severe, with UnitedHealth shares dropping to around $282 from a previous close of approximately $352, marking one of the largest single-day declines in the company's history [4]. - This decline also negatively affected other major players in the Medicare Advantage sector, such as Humana, following disappointing proposals for government payment rates for 2027 [4]. Strategic Focus - UnitedHealth's executives emphasized the need for short-term sacrifices to reposition the business for future stability and growth, with plans to refocus on core markets and streamline operations under new leadership [6]. - The company expressed confidence in returning to growth in 2026, despite current challenges related to medical costs and care activity for new Medicare Advantage beneficiaries [6].

How CFOs Can Keep Balance Sheets Healthy As Medical Costs Climb https://t.co/L6633TUGxy ...

Healthcare Costs - Medical costs for Americans on group insurance are projected to increase by 8.5% [1] - Costs for plans purchased through the Affordable Care Act are also expected to rise [1]

HSA Trends - Older workers typically hold the largest HSA balances [1] - Older workers contribute and withdraw more from HSAs [1] - Medical costs typically grow with age, impacting HSA activity [1]

Core Insights - Centene Corporation is facing significant challenges due to elevated utilization rates and rising medical costs, similar to pressures affecting the broader healthcare industry [1][4] - Membership losses in Medicaid and Medicare Advantage are eroding Centene's base, leading to a decline in stock price and valuation below industry averages [2][4] Valuation and Performance - Centene's forward P/E ratio is 13.25X, lower than the industry average of 16.16X but above its five-year median of 11.24X [3][6] - The stock has decreased by 43.2% year-to-date, underperforming compared to industry peers and the S&P 500 [4] Financial Metrics - Operating expenses increased by 5.5% in 2023, 5.8% in 2024, and surged by 21.1% in the first half of 2025, driven by rising medical costs [7] - The health benefits ratio (HBR) rose from 87.7% in 2023 to 93% in Q2 2025, indicating reduced profitability [7][8] - Adjusted net margin fell from 2.3% to negative 0.2%, with 2025 EPS guidance revised down to $1.75 from $7.25 [8] Debt and Returns - Centene's long-term debt is $17.6 billion, reflecting a debt-heavy balance sheet due to acquisitions [9] - The trailing 12-month return on invested capital is 6.7%, below the industry average of 9% [9] Market Outlook - The Zacks Consensus Estimate for 2025 earnings is $1.64 per share, a 77.1% decrease year-over-year, with eight downward revisions in the past 60 days [11] - Revenue is expected to grow by 16.9% in 2025, despite the challenges [11] Strengths and Opportunities - Centene's commercial business is expanding, with marketplace memberships increasing by 33.2% in Q2 2025 [15] - Medicare quality scores are stable, with a larger portion of members in four-star plans, which qualify for bonus payments [16] Conclusion - Centene's lower valuation may seem attractive, but underlying issues such as rising medical costs, declining memberships, and heavy debt present significant challenges [17] - While there are some positive indicators, they are insufficient to counterbalance the operational and financial headwinds in the near term [17]

Core Insights - Centene Corporation (CNC) reported a second-quarter 2025 adjusted loss per share of 16 cents, missing the Zacks Consensus Estimate of earnings of 68 cents, and a significant decline from the year-ago profit of $2.42 per share [1][11] Financial Performance - The company's revenues increased by 22.4% year over year to $48.7 billion, surpassing the consensus mark by 10.9% [2][11] - Medicaid revenues grew 7% year over year to $21.7 billion, while Medicare revenues surged 58% year over year to $9.5 billion [3] - Commercial revenues improved 18% year over year to $10.1 billion [3] - Total premiums reached $41.7 billion, an 18.8% year-over-year increase, driven by higher premiums and an expanding membership base [4] Membership and Operational Metrics - Total membership (excluding TRICARE) was 28 million as of June 30, 2025, reflecting an 8.9% year-over-year growth, although there were declines in Medicaid and Medicare memberships [6] - The health benefits ratio deteriorated to 93%, a 540 basis point decline year over year, exceeding the consensus mark of 90.82% [7] Expenses and Losses - Operating expenses totaled $49.2 billion, a 27.4% year-over-year increase, attributed to rising medical costs, premium tax expenses, and administrative costs [7] - Adjusted net loss was recorded at $79 million, contrasting with year-ago earnings of $1.3 billion [8] Cash and Equity Position - As of June 30, 2025, Centene had cash and cash equivalents of $14.5 billion, up from $14.1 billion at the end of 2024 [9] - Total assets increased to $86.4 billion from $82.4 billion at the end of 2024, while long-term debt decreased to $17.6 billion from $18.4 billion [9] Share Repurchase Activity - Centene repurchased common shares worth approximately $432 million in the second quarter of 2025 [12] Peer Comparison - Elevance Health, Inc. reported second-quarter 2025 adjusted EPS of $8.84, missing estimates and showing a 12.6% year-over-year decline [13] - UnitedHealth Group is expected to report a significant year-over-year decline in profits despite a projected 12.8% revenue increase [14]

Financial Performance - Elevance Health cut its profit outlook for the year [1] Healthcare Industry Dynamics - Higher medical costs in Affordable Care Act plans impacted Elevance Health [1] - Lower reimbursement from Medicaid impacted Elevance Health [1]