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Molina's (MOH) Q2 Earnings Beat Estimate: Will Stock Gain?
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Molina Healthcare Inc. (MOH - Free Report) reported second-quarter 2016 adjusted net income per share of 67 cents that handily beat the Zacks Consensus Estimate of 52 cents by 29%. Earnings also improved 31% year over year.
Including one-time items, net income per diluted share surged 35% year over year to 58 cents.
Improvement in Ohio and Texas health plans, driven by substantial decrease in the medical care ratio, mainly contributed to the upside.
Operational Update
Operating revenues rose 24% year over year to $4.4 billion, mainly due to the increase in premium revenues and investment income, service revenues, premium tax revenues and Health insurer fee revenues. Also, revenues marginally missed the Zacks Consensus Estimate.
Premium revenues jumped 21% year over year to $4.0 billion due to strong enrolment growth.
Service revenues soared 187% year on year to $135 million.
Further, Molina Healthcare’s investment income grew 100% year over year to $8 million. Premium tax revenues also increased 14.7% to $109 million in the second quarter.
Total operating expenses rose 23% year over year to $4.2 billion due to 22.7% higher Medical care costs, 251% increase in cost of service revenues, 22% rise in general and administrative expenses, 14.7% higher premium tax expenses, 25% increase in HIF expenses, anad a 36% rise in depreciation and amortization costs; all on a year-over-year basis.
Operating income decreased 9.5% year over year to $105 million in the quarter.
Additionally, Molina Healthcare’s interest expenses increased 66.7% year over year to $25 million. Medical care ratio (ratio of medical care costs to premium revenues) was 89.2%, up 50 basis points year over year.
Membership increased 26% year over year.
Financial Update
As of Jun 30, 2016, Molina Healthcare’s cash and cash equivalents rose 0.7% from that at year-end 2015 to $2.3 billion. As of Jun 30, 2016, total assets increased 9.5% to $7.2 billion from $6.6 billion at the end of 2015. Molina Healthcare’s shareholder equity inched up 2% from year-end 2015 to $1.6 billion at the end of the reported quarter.
Net cash from operating activities amounted to $139 million in the quarter as against $94 million a year ago, primarily due to receivables and prepaid expenses and other assets.
Molina Healthcare currently carries a Zacks Rank #4 (Sell). UnitedHealth Group Inc. (UNH - Free Report) and Anthem Inc’s second-quarter earnings surpassed the Zacks Consensus Estimate. Another health, maintenance organization Humana Inc. (HUM - Free Report) with Zacks Rank #1 is scheduled to report its second-quarter results on Aug 2.
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Molina's (MOH) Q2 Earnings Beat Estimate: Will Stock Gain?
Molina Healthcare Inc. (MOH - Free Report) reported second-quarter 2016 adjusted net income per share of 67 cents that handily beat the Zacks Consensus Estimate of 52 cents by 29%. Earnings also improved 31% year over year.
Including one-time items, net income per diluted share surged 35% year over year to 58 cents.
Improvement in Ohio and Texas health plans, driven by substantial decrease in the medical care ratio, mainly contributed to the upside.
Operational Update
Operating revenues rose 24% year over year to $4.4 billion, mainly due to the increase in premium revenues and investment income, service revenues, premium tax revenues and Health insurer fee revenues. Also, revenues marginally missed the Zacks Consensus Estimate.
Premium revenues jumped 21% year over year to $4.0 billion due to strong enrolment growth.
Service revenues soared 187% year on year to $135 million.
Further, Molina Healthcare’s investment income grew 100% year over year to $8 million. Premium tax revenues also increased 14.7% to $109 million in the second quarter.
Total operating expenses rose 23% year over year to $4.2 billion due to 22.7% higher Medical care costs, 251% increase in cost of service revenues, 22% rise in general and administrative expenses, 14.7% higher premium tax expenses, 25% increase in HIF expenses, anad a 36% rise in depreciation and amortization costs; all on a year-over-year basis.
Operating income decreased 9.5% year over year to $105 million in the quarter.
Additionally, Molina Healthcare’s interest expenses increased 66.7% year over year to $25 million. Medical care ratio (ratio of medical care costs to premium revenues) was 89.2%, up 50 basis points year over year.
Membership increased 26% year over year.
Financial Update
As of Jun 30, 2016, Molina Healthcare’s cash and cash equivalents rose 0.7% from that at year-end 2015 to $2.3 billion. As of Jun 30, 2016, total assets increased 9.5% to $7.2 billion from $6.6 billion at the end of 2015. Molina Healthcare’s shareholder equity inched up 2% from year-end 2015 to $1.6 billion at the end of the reported quarter.
Net cash from operating activities amounted to $139 million in the quarter as against $94 million a year ago, primarily due to receivables and prepaid expenses and other assets.
MOLINA HLTHCR Price, Consensus and EPS Surprise
MOLINA HLTHCR Price, Consensus and EPS Surprise | MOLINA HLTHCR Quote
Zacks Rank and the Performance of Other Stocks
Molina Healthcare currently carries a Zacks Rank #4 (Sell). UnitedHealth Group Inc. (UNH - Free Report) and Anthem Inc’s second-quarter earnings surpassed the Zacks Consensus Estimate. Another health, maintenance organization Humana Inc. (HUM - Free Report) with Zacks Rank #1 is scheduled to report its second-quarter results on Aug 2.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>