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Molina Healthcare (MOH) Q3 Earnings Top, 2022 EPS View Up
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Molina Healthcare, Inc. (MOH - Free Report) reported third-quarter 2022 adjusted earnings of $4.36 per share, which outpaced the Zacks Consensus Estimate by 2.6%. The bottom line soared 54% year over year.
MOH’s total revenues amounted to $7.9 billion, which rose 12.6% year over year in the quarter under review and beat the consensus mark by a whisker. Our estimate for the metric stands at $7.8 billion.
The quarterly results gained from higher premium revenues and new business wins. However, the adjusted earnings per share (EPS) figure suffered an adverse impact of 59 cents due to the net COVID effect.
Molina Healthcare, Inc Price, Consensus and EPS Surprise
Premium revenues improved 12% year over year to $7.6 billion in the third quarter, courtesy of buyouts and growing organic membership within Medicaid and Medicare businesses. The metric came in line with the Zacks Consensus Estimate and beat our estimate of $7.5 billion.
Total operating expenses of Molina Healthcare escalated 11.3% year over year to $7.6 billion, primarily due to higher medical care costs, general and administrative expenses, and premium tax expenses. Our estimate for the metric stands at $7.4 billion.
Interest expenses of $28 million fell 6.7% year over year.
Net income of MOH surged 60.8% year over year to $230 million in the quarter under review.
The consolidated medical care ratio (medical costs as a percentage of premium revenues) or MCR improved 50 basis points (bps) year over year to 88.4%. The metric witnessed an improvement despite suffering a headwind of around 60 bps due to the net COVID effect.
MOH’s total membership stood at around 5.2 million members, up 7% year over year, thanks to the well-performing Medicaid and Medicare businesses. The metric surpassed the consensus mark of 4.9 million and our estimate of 4.8 million.
Financial Update (as of Sep 30, 2022)
Molina Healthcare exited the third quarter with cash and cash equivalents of $4.2 billion, down 4.4% from the figure at 2021 end. Total assets of $12.8 billion grew 4.8% from the 2021-end level.
Long-term debt amounted to $2.2 billion, inching up marginally from the figure as of Dec 31, 2021.
Total stockholders’ equity of $3 billion climbed 15.6% from the 2021-end level.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities plunged 35.3% from the prior-year comparable period’s level to $985 million due to timing differences in government receivables and payables. However, the downside was partly mitigated by better net earnings.
2022 Guidance
Management altered guidance for this year with respect to certain metrics.
Premium revenues are projected to be roughly $30.5 billion, higher than the prior outlook of around $30 billion. The revised guidance implies an improvement of 13.4% from the 2021 figure. The Public Health Emergency, extended from October of this year to January 2023, solid third-quarter 2022 results and the AgeWell buyout completed this month contributed to the positive revision in the premium revenue guidance.
Adjusted EPS is estimated to be a minimum of $17.75, up from the previous projection of at least $17.60. The hiked outlook suggests growth of 31.1% from the 2021 reported figure.
Net income of Molina Healthcare is expected to be $1 billion, marginally higher than the prior estimate. The updated outlook indicates a surge of 57.5% from the 2021 reported figure.
Prior Projections
This year, total revenues were anticipated to be $29.5 billion, implying an improvement of around 6% from the 2021 figure.
Total membership for 2022 was estimated at 4.5 million, indicating a 13.5% fall from the 2021-end figure.
Consolidated MCR was forecast at 88%, reflecting a 30 bps improvement from the 2021 figure.
Of the Medical sector players that have reported third-quarter results so far, the bottom line results of Universal Health Services, Inc. (UHS - Free Report) , Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the respective Zacks Consensus Estimate.
Universal Health reported third-quarter 2022 adjusted earnings of $2.54 per share, which beat the Zacks Consensus Estimate by 5.8%. However, the bottom line fell 4.9% year over year. Net revenues of $3.3 billion improved 5.7% year over year in the third quarter. The top line outpaced the consensus mark by a whisker. Adjusted admissions (adjusted for outpatient activity) rose 1.9% year over year on a same-facility basis at UHS’ acute care hospitals, while adjusted patient days declined 5% year over year.
Centene’s third-quarter 2022 adjusted earnings per share of $1.30 outpaced the Zacks Consensus Estimate by 6.6%. The bottom line grew 3.2% year over year. CNC’s revenues of $35.9 billion advanced 11% year over year in the quarter under review and also beat the consensus mark by 1.1%. Premiums of $31.8 billion rose 10.3% year over year in the quarter under review, while service revenues climbed 14.7% year over year to $1.9 billion.
HCA Healthcare reported third-quarter 2022 adjusted earnings of $3.93 per share, which beat the Zacks Consensus Estimate by 1%. However, the bottom line dropped 14% year over year. Revenues of HCA decreased 2% year over year to $15 billion in the third quarter and missed the consensus mark by a whisker. Same-facility equivalent admissions rose 2.3% year over year in the third quarter, while same-facility admissions fell 1.5% year over year.
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Molina Healthcare (MOH) Q3 Earnings Top, 2022 EPS View Up
Molina Healthcare, Inc. (MOH - Free Report) reported third-quarter 2022 adjusted earnings of $4.36 per share, which outpaced the Zacks Consensus Estimate by 2.6%. The bottom line soared 54% year over year.
MOH’s total revenues amounted to $7.9 billion, which rose 12.6% year over year in the quarter under review and beat the consensus mark by a whisker. Our estimate for the metric stands at $7.8 billion.
The quarterly results gained from higher premium revenues and new business wins. However, the adjusted earnings per share (EPS) figure suffered an adverse impact of 59 cents due to the net COVID effect.
Molina Healthcare, Inc Price, Consensus and EPS Surprise
Molina Healthcare, Inc price-consensus-eps-surprise-chart | Molina Healthcare, Inc Quote
Quarterly Operational Update
Premium revenues improved 12% year over year to $7.6 billion in the third quarter, courtesy of buyouts and growing organic membership within Medicaid and Medicare businesses. The metric came in line with the Zacks Consensus Estimate and beat our estimate of $7.5 billion.
Total operating expenses of Molina Healthcare escalated 11.3% year over year to $7.6 billion, primarily due to higher medical care costs, general and administrative expenses, and premium tax expenses. Our estimate for the metric stands at $7.4 billion.
Interest expenses of $28 million fell 6.7% year over year.
Net income of MOH surged 60.8% year over year to $230 million in the quarter under review.
The consolidated medical care ratio (medical costs as a percentage of premium revenues) or MCR improved 50 basis points (bps) year over year to 88.4%. The metric witnessed an improvement despite suffering a headwind of around 60 bps due to the net COVID effect.
MOH’s total membership stood at around 5.2 million members, up 7% year over year, thanks to the well-performing Medicaid and Medicare businesses. The metric surpassed the consensus mark of 4.9 million and our estimate of 4.8 million.
Financial Update (as of Sep 30, 2022)
Molina Healthcare exited the third quarter with cash and cash equivalents of $4.2 billion, down 4.4% from the figure at 2021 end. Total assets of $12.8 billion grew 4.8% from the 2021-end level.
Long-term debt amounted to $2.2 billion, inching up marginally from the figure as of Dec 31, 2021.
Total stockholders’ equity of $3 billion climbed 15.6% from the 2021-end level.
During the first nine months ended Sep 30, 2022, net cash provided by operating activities plunged 35.3% from the prior-year comparable period’s level to $985 million due to timing differences in government receivables and payables. However, the downside was partly mitigated by better net earnings.
2022 Guidance
Management altered guidance for this year with respect to certain metrics.
Premium revenues are projected to be roughly $30.5 billion, higher than the prior outlook of around $30 billion. The revised guidance implies an improvement of 13.4% from the 2021 figure. The Public Health Emergency, extended from October of this year to January 2023, solid third-quarter 2022 results and the AgeWell buyout completed this month contributed to the positive revision in the premium revenue guidance.
Adjusted EPS is estimated to be a minimum of $17.75, up from the previous projection of at least $17.60. The hiked outlook suggests growth of 31.1% from the 2021 reported figure.
Net income of Molina Healthcare is expected to be $1 billion, marginally higher than the prior estimate. The updated outlook indicates a surge of 57.5% from the 2021 reported figure.
Prior Projections
This year, total revenues were anticipated to be $29.5 billion, implying an improvement of around 6% from the 2021 figure.
Total membership for 2022 was estimated at 4.5 million, indicating a 13.5% fall from the 2021-end figure.
Consolidated MCR was forecast at 88%, reflecting a 30 bps improvement from the 2021 figure.
Zacks Rank
Molina Healthcare currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported third-quarter results so far, the bottom line results of Universal Health Services, Inc. (UHS - Free Report) , Centene Corporation (CNC - Free Report) and HCA Healthcare, Inc. (HCA - Free Report) beat the respective Zacks Consensus Estimate.
Universal Health reported third-quarter 2022 adjusted earnings of $2.54 per share, which beat the Zacks Consensus Estimate by 5.8%. However, the bottom line fell 4.9% year over year. Net revenues of $3.3 billion improved 5.7% year over year in the third quarter. The top line outpaced the consensus mark by a whisker. Adjusted admissions (adjusted for outpatient activity) rose 1.9% year over year on a same-facility basis at UHS’ acute care hospitals, while adjusted patient days declined 5% year over year.
Centene’s third-quarter 2022 adjusted earnings per share of $1.30 outpaced the Zacks Consensus Estimate by 6.6%. The bottom line grew 3.2% year over year. CNC’s revenues of $35.9 billion advanced 11% year over year in the quarter under review and also beat the consensus mark by 1.1%. Premiums of $31.8 billion rose 10.3% year over year in the quarter under review, while service revenues climbed 14.7% year over year to $1.9 billion.
HCA Healthcare reported third-quarter 2022 adjusted earnings of $3.93 per share, which beat the Zacks Consensus Estimate by 1%. However, the bottom line dropped 14% year over year. Revenues of HCA decreased 2% year over year to $15 billion in the third quarter and missed the consensus mark by a whisker. Same-facility equivalent admissions rose 2.3% year over year in the third quarter, while same-facility admissions fell 1.5% year over year.