Latest news with #DentaQuest
Globe and Mail
3 days ago
- Business
- Globe and Mail
Sun Life shares plunge as Medicaid funding uncertainty prompts revision to U.S. dental forecast
Sun Life Financial's SLF-T shares plunged as much as 8.5 per cent on Friday, a day after the Canadian insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty over Medicaid funding. Sun Life, which bulked up its dental business through the US$2.5-billion acquisition of DentaQuest in 2022, said underlying net income for the dental business, which has struggled in past quarters, is expected to be below US$100-million in 2025. The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said. Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding. 'The claims are also increasing at a faster pace, which I partially think is because people are seeing that they may lose their Medicaid benefits. So they're going to the dentist more quickly,' CEO Kevin Strain said in an interview on Friday. Strain noted that the states have been reluctant to pass on the increased claims costs, something he expects to sort itself out over the next few years. 'If we're struggling, you can imagine that the smaller players are really struggling with it ... We'll work our way through it,' he said. The U.S. remained one of the company's fastest growing and least capital-intensive regions, Strain added. Sun Life posts rise in quarterly profit on strong Asia-unit performance Sun Life expects over 12-per-cent underlying net income growth for Sun Life U.S. in the long term, with the dental business expected to contribute at least a third of overall earnings in the region. The stock has lost about 8 per cent of its value, including Thursday's losses, while peer Manulife which also reported weakness in its U.S. business, is down 6.5 per cent. 'We believe that a reversal in the (Sun Life's) U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter,' National Bank analyst Gabriel Dechaine said. Analysts have said Sun Life's dental business could be vulnerable to provisions in U.S. President Donald Trump's recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, which aims to cut Medicaid spending. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time. Underlying net income fell 4 per cent in the U.S., which accounts for about a fifth of the company's underlying earnings. Its underlying earnings of $1.79 in the second quarter were above analysts' average estimate of $1.78 per share, according to LSEG data.
Reuters
3 days ago
- Business
- Reuters
Sun Life shares plunge as Medicaid uncertainty prompts US dental forecast revision
TORONTO, Aug 8 (Reuters) - Sun Life Financial's ( opens new tab shares plunged as much as 8.5% on Friday, a day after the Canadian insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty over Medicaid funding. Sun Life, which bulked up its dental business through the $2.5 billion acquisition of DentaQuest in 2022, said underlying net income for the dental business, which has struggled in past quarters, is expected to be below $100 million in 2025. The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said. Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding. "The claims are also increasing at a faster pace, which I partially think is because people are seeing that they may lose their Medicaid benefits. So they're going to the dentist more quickly," CEO Kevin Strain said in an interview on Friday. Strain noted that the states have been reluctant to pass on the increased claims costs, something he expects to sort itself out over the next few years. "If we're struggling, you can imagine that the smaller players are really struggling with it ... We'll work our way through it," he said. The U.S. remained one of the company's fastest growing and least capital-intensive regions, Strain added. Sun Life expects over 12% underlying net income growth for Sun Life U.S. in the long term, with the dental business expected to contribute at least a third of overall earnings in the region. The stock has lost about 8% of its value, including Thursday's losses, while peer Manulife ( opens new tab which also reported weakness in its U.S. business, is down 6.5%. "We believe that a reversal in the (Sun Life's) U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter," National Bank analyst Gabriel Dechaine said. Analysts have said Sun Life's dental business could be vulnerable to provisions in U.S. President Donald Trump's recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, which aims to cut Medicaid spending. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time. Underlying net income fell 4% in the U.S., which accounts for about a fifth of the company's underlying earnings. Its underlying earnings of C$1.79 in the second quarter were above analysts' average estimate of C$1.78 per share, according to LSEG data.
Yahoo
3 days ago
- Business
- Yahoo
Sun Life shares fall as Medicaid uncertainty prompts US dental forecast revision
By Nivedita Balu TORONTO (Reuters) -Sun Life Financial's shares fell nearly 8% in early trade on Friday after the Canadian life insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty in Medicaid funding. The insurer, which bulked up its dental business through the $2.5 billion acquisition of DentaQuest in 2022, said underlying net income for the dental business this year is expected to be below $100 million. The unit has struggled in recent quarters. The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said. Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding. "We believe that a reversal in the U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter," National Bank analyst Gabriel Dechaine said. Analysts have said Sun Life's dental business could be vulnerable to provisions in U.S. President Donald Trump's recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, that targets Medicaid cuts. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time. Sun Life still expects over 12% underlying net income growth for Sun Life U.S., with the dental business expected to contribute at least a third of overall earnings in the region. Underlying net income fell 4% in the U.S., which accounts for about a fifth of the company's underlying earnings. Its underlying earnings of C$1.79 in the second quarter were above analysts' average estimate of C$1.78 per share, according to LSEG data. Peer Manulife reported earnings below analysts' estimates, hurt by weakness in its U.S. business. Error while retrieving data Sign in to access your portfolio Error while retrieving data Error while retrieving data Error while retrieving data Error while retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Sun Life shares fall as Medicaid uncertainty prompts US dental forecast revision
By Nivedita Balu TORONTO (Reuters) -Sun Life Financial's shares fell nearly 8% in early trade on Friday after the Canadian life insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty in Medicaid funding. The insurer, which bulked up its dental business through the $2.5 billion acquisition of DentaQuest in 2022, said underlying net income for the dental business this year is expected to be below $100 million. The unit has struggled in recent quarters. The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said. Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding. "We believe that a reversal in the U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter," National Bank analyst Gabriel Dechaine said. Analysts have said Sun Life's dental business could be vulnerable to provisions in U.S. President Donald Trump's recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, that targets Medicaid cuts. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time. Sun Life still expects over 12% underlying net income growth for Sun Life U.S., with the dental business expected to contribute at least a third of overall earnings in the region. Underlying net income fell 4% in the U.S., which accounts for about a fifth of the company's underlying earnings. Its underlying earnings of C$1.79 in the second quarter were above analysts' average estimate of C$1.78 per share, according to LSEG data. Peer Manulife reported earnings below analysts' estimates, hurt by weakness in its U.S. business.
Reuters
3 days ago
- Business
- Reuters
Sun Life shares fall as Medicaid uncertainty prompts US dental forecast revision
TORONTO, Aug 8 (Reuters) - Sun Life Financial's ( opens new tab shares fell nearly 8% in early trade on Friday after the Canadian life insurer said it would miss a 2025 profit target for its dental business in the U.S. due to uncertainty in Medicaid funding. The insurer, which bulked up its dental business through the $2.5 billion acquisition of DentaQuest in 2022, said underlying net income for the dental business this year is expected to be below $100 million. The unit has struggled in recent quarters. The forecast revision was driven by uncertain Medicaid funding resulting in slower negotiations with states on coverage rates and higher Medicaid claims, the company said. Sun Life works with U.S. states to administer Medicaid and Medicare Advantage dental benefits through the DentaQuest business and is dependent on government funding. "We believe that a reversal in the U.S. dental business that caused the company to retract its 2025 profit target for this business has implications beyond the quarter," National Bank analyst Gabriel Dechaine said. Analysts have said Sun Life's dental business could be vulnerable to provisions in U.S. President Donald Trump's recent tax-cut and spending legislation, known as the One Big Beautiful Bill Act, that targets Medicaid cuts. That could weigh on the future growth of the business as tighter eligibility requirements could shrink Medicaid enrollment over time. Sun Life still expects over 12% underlying net income growth for Sun Life U.S., with the dental business expected to contribute at least a third of overall earnings in the region. Underlying net income fell 4% in the U.S., which accounts for about a fifth of the company's underlying earnings. Its underlying earnings of C$1.79 in the second quarter were above analysts' average estimate of C$1.78 per share, according to LSEG data. Peer Manulife ( opens new tab reported earnings below analysts' estimates, hurt by weakness in its U.S. business.
