Centene Corporation (CNC) shares plunged 35.30% in pre-market trading on Wednesday after the health insurer withdrew its 2025 earnings guidance, citing significant challenges in its marketplace health insurance plans. The company's decision came following an analysis of new industry data that revealed lower-than-expected market growth and higher-than-anticipated patient morbidity.

According to Centene's preliminary analysis of data from 22 of its 29 marketplace states, the company expects a substantial $1.8 billion reduction in its net risk adjustment revenue. This corresponds to an approximate $2.75 impact on adjusted diluted earnings per share (EPS). The company had previously forecast 2025 adjusted EPS of more than $7.25. Centene warned that the financial impact could be even greater once data from the remaining seven states is factored in.

In addition to the marketplace challenges, Centene reported elevated medical costs in its Medicaid business, particularly in behavioral health, home health, and high-cost drugs. The company expects its second-quarter 2025 Medicaid Health Benefits Ratio to be higher than the first quarter, indicating ongoing pressure on profitability. Despite these setbacks, Centene noted that its Medicare Advantage and Medicare Prescription Drug Plan businesses are performing better than expected in the second quarter of 2025.