Centene Shares Drop After Insurer Reports Surprise Losses
Shares dropped 12.7% before markets opened in New York. They had fallen 56% since the start of the year. Centene said it would provide updated guidance on a conference call with analysts, which starts at 8 a.m. New York time, an unusual move given the insurer normally shares its outlook in earnings releases.
'Given how weak results were in the quarter, the lack of guidance in the release could mean that 2025 guidance is weaker than analysts had been projecting,' Morningstar analyst Julie Utterback said. After the earnings miss, Centene executives might want to 'hold investor hands through the rest of 2025 and beyond,' she said.
The insurer chalked up the second-quarter loss to a miscalculation in its Affordable Care Act, or ACA, business — the same reason it pulled its outlook earlier this year. Insurers receive compensation for taking on sicker patients in that program and Centene said it would receive less of that money than previously expected.
For the second quarter, Centene announced an adjusted loss per share of 16 cents. Wall Street analysts expected a profit of 55 cents per share.
'We are disappointed by our second-quarter results, but we have a clear understanding of the trends that have impacted our performance, and are working with urgency and focus to restore our earnings trajectory,' Sarah London, chief executive officer of Centene, said in the company's earnings statement.
In the second quarter, Centene spent 93% of premium revenues of medical costs, higher than the average analyst expectation of 91.6%. Investors prefer a lower number.
The insurer said its health benefits ratio, the percentage of premium revenues spent on medical costs, rose from last year, largely because of the ACA revenue issue. Centene said it also saw higher medical costs in ACA plans, as well as increased costs in Medicaid, which mostly came from behavioral health, home health, and expensive drugs.
Because of various government programs that are likely to reduce health care coverage, patients may be seeking more medical care now while they still can, boosting medical spending, the company said in a regulatory filing Friday.
--With assistance from John Tozzi.
(Updates with analyst comment in third paragraph.)
More stories like this are available on bloomberg.com
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
a minute ago
- Mint
Codelco Finds Human Remains in Blow to Chile Mine Rescue Efforts
(Bloomberg) -- Codelco found human remains during its efforts to reach five workers trapped underground in a central Chilean copper mine, dealing a blow to the state-controlled company's rescue efforts. Just hours after telling reporters that there was a chance the workers would be found safe in a collapsed tunnel at the El Teniente mine, a Codelco official said authorities and families of the trapped workers had been informed of the discovery of remains that haven't yet been identified. 'This discovery fills us with sadness, but it also shows us that we are in the right place, that the strategy followed led us to them,' said Andrés Music, who heads the operations for the mine, which is located south of Santiago. 'We will continue working with all our strength and hope but now with greater caution, which could mean that progress will be slower,' he said about the rescue efforts. The world's biggest copper supplier halted production at the site after a collapse attributed to seismic activity on Thursday trapped workers in a new section of the mine, called Andesita. One person had been confirmed dead and nine others were injured in the incident, the latest setback for Codelco's efforts to recover from a years-long output slump. A 100-person team — including some of those who helped rescue 33 workers trapped in another Chilean mine in 2010 — has been working on the El Teniente rescue effort. Days after celebrating the US government's decision to spare its copper from hefty tariffs, Codelco is reeling from the deadly incident and facing renewed doubts about its ability to meet its production target. El Teniente is crucial for Codelco's aim to return to pre-pandemic production levels of about 1.7 million tons (1.5 million metric tons) a year from about 1.4 million tons currently. Codelco delayed reporting its quarterly results, including annual production guidance, on Friday as it deals with the accident. When production can resume at the mine will depend on the outcome of an investigation into the collapse, how much reinforcement of infrastructure is required and whether mining method adjustments are needed. Mines in Chile are designed to withstand much stronger seismic activity than the 4.2-magnitude event that caused the collapse. More stories like this are available on
Hindustan Times
11 hours ago
- Hindustan Times
Once a retail empire, Carrefour struggles to win back investors
(Bloomberg) -- Carrefour SA pioneered hypermarkets in France and sold the brand around the world in an ambitious expansion that started more than five decades ago, reaching a market value that was once higher than that of luxury-goods empire LVMH. French retailer Carrefour's fortunes have waned as the chain struggles to compete in its cut-throat home market and it retreats from overseas. (Representational photo) = (pexels) Since then, Carrefour's fortunes have waned as the chain struggles to compete in its cut-throat home market and it retreats from overseas. Its business is worth a fraction of LVMH's, the current global flag-bearer for French business, and Chairman and Chief Executive Officer Alexandre Bompard is struggling to convince investors that he can propel it through a transformation. Carrefour shares hit a 32-year low in June after JPMorgan Chase & Co. placed the stock on negative catalyst watch and downgraded its estimates. Bompard responded by offloading flagging operations in Italy, and a better-than-expected sales print contributed to an uptick in shares. But that was quickly replaced by concerns over the grocer's future after years of stagnating profits. Investors are still asking the same question of Bompard from when he took the helm eight years ago - can he spur growth at Carrefour, when many previous CEOs have failed? Plenty of observers bet he can't. Carrefour is among the most-shorted grocery chains in Europe, with shares out on loan at 6% of the free float as of July 24, according to data from S&P Global Market Intelligence. The stock is still down about 10% this year, and in the last two decades it's the only major European grocer to provide a negative return. 'We are far from assuming this turnaround with the trends we see and in the context of the mixed track record of the company,' JPMorgan analyst Borja Olcese said in a note after the earnings last week. Despite the poor share performance, Bompard, who answers to shareholders including the billionaire Moulin family heirs and the descendants of late Brazilian businessman Abilio Diniz, is sticking around with the board intending to renew his mandate next year. Global Footprint Carrefour Chief Financial Officer Matthieu Malige said a strategic review still has plenty of scope and the company isn't ruling out selling its Polish business, which some analysts say is loss-making. 'There are many situations including the one in Poland that are being reviewed,' he said in an interview this week. The sale in Italy confirmed how little value was left in Carrefour's fifth biggest market, with the grocer paying the new owner, Italian food company NewPrinces SpA, €240 million ($277 million) to take it off its hands. Carrefour's expansion since the 1970s left it with a footprint in more than 40 countries, many of them underperforming. Part of the company's challenges lies in its dependence on the hypermarkets that sell everything from fresh fruit to clothes and washing machines at a time when shoppers prefer online purchases, especially for non-food items. Home and electrical products account for about 10% of sales, while for French rival Leclerc the category is 5% and for British supermarket J Sainsbury Plc it's 3%, according to a Bernstein report. Last year Carrefour acquired 55 more hypermarkets, raising concerns for some analysts about Bompard's strategy. 'They still need to fix the core basics of being a food retailer in terms of price and format and product,' said William Woods, an analyst at Bernstein. Challenges at Home France is particularly difficult to operate in as the majority of food retailers are private or cooperatives, which aren't bound by the same shareholder expectations. 'You're fighting against independent players who are playing a totally different game, can make it with smaller margins and have different ways to make a living, such as as renting part of their real estate into malls,' said Gilles Guibout, head of European equities at AXA IM. Unlike other countries, the French government polices relationships with suppliers to ensure prices are kept low for consumers while pushing retailers to pay more to farmers. Other major grocers have boosted their business through online delivery but Carrefour has been slower to this trend. It also doesn't have a tight operating model to allow it to compete aggressively on price with the likes of market leader Leclerc, according to analysts. Still, the picture is looking brighter as consumers recover from a period of hyperinflation and restore their purchasing power, Carrefour's Malige said. Profitability is increasing, online delivery is rapidly growing and a strategy to switch hypermarkets into a franchise model is bearing fruit, he added. Regional Deals Carrefour recently entered a buying alliance with France's fourth-biggest grocer, Cooperative U, to cut costs in Europe, but it's unclear how effective this will be after similar deals including with UK's Tesco Plc were shortlived. Meanwhile, failed mergers have been a thorn in the side of Bompard. The French government effectively blocked a $20 billion takeover proposal by Canadian retailer Alimentation Couche-Tard Inc. in 2021. Rival French grocer Auchan considered a potential offer multiple times, though a deal has never materialized. Bernard Arnault, the billionaire CEO of LVMH Moët Hennessy Louis Vuitton SE, sold off his remaining 5.7% stake in Carrefour after the Couche-Tard talks collapsed. It was an embarrassment for Arnault who sold at a €16 per share level after taking a holding in 2007, when prices were around €47 a share. Shrinking Value Carrefour's market value has shrunk to around €9 billion, which is less than the deal it struck to takeover rival Promodes in 1999 when it was in peak expansion mode among the world's largest retailers. As recently as 2009, Carrefour was just as valuable as LVMH, but the luxury giant now is worth €231 billion. Despite the board's backing for Bompard, some investors are voicing discontent. Activist Whitelight held a short position in the grocer last year but is now long, betting on a new takeover. 'What we need is a turnaround CEO who can really focus on raising the profitability of supermarkets' and 'take a look, asset by asset, on the hypermarkets,' said Kevin Romanteau, Whitelight Capital's founder. --With assistance from Lisa Pham, James Cone and Tara Patel. More stories like this are available on ©2025 Bloomberg L.P.
&w=3840&q=100)
Business Standard
14 hours ago
- Business Standard
New Zealand to charge foreign tourists up to NZ$40 at popular sites
The country's pristine national parks and great walks are "truly special to New Zealanders" and foreigners should pay a fee at high traffic sites, Prime Minister Christopher Luxon said in a speech Bloomberg New Zealand will begin charging foreign tourists up to NZ$40 ($24) to visit its most popular tourist destinations such as Milford Track and Mount Cook as the government seeks ways to help spur economic growth. The country's pristine national parks and great walks are 'truly special to New Zealanders' and foreigners should pay a fee at high traffic sites, Prime Minister Christopher Luxon said in a speech Saturday. The NZ$62 million in annual revenue generated will be re-invested into those locations, he said. 'I have heard many times from friends visiting from overseas their shock that they can visit some of the most beautiful places in the world for free,' Luxon said. 'It's only fair that at these special locations, foreign visitors make an additional contribution of between NZ$20 and NZ$40 per person.' New Zealand has earmarked tourism as a key avenue to generate economic growth as the nation's recovery from a recession last year gathers pace. The government from November will replace a costly transit visa for Chinese travelers in a bid to attract visitors. The government will initially consider introducing the fee at Cathedral Cove, Tongariro Crossing, Milford Track and Mount Cook, sites where foreigners often make up 80 per cent of visitors, Luxon said. 'At the same time, there will be no charge for New Zealanders to access the conservation estate,' he said. 'It's our collective inheritance and Kiwis shouldn't have to pay to see it.'
