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Molina Healthcare, Inc.’s (MOH - Free Report) second-quarter 2018 adjusted earnings of $2.25 per share surpassed the Zacks Consensus Estimate of $1.09 cents by a whopping 106.4%. This upside was driven by managed care fundamentals, margin recovery and effective performance management. The bottom line also came in against the prior-year quarter’s loss of 1 cent.
Primarily related to theMarketplace risk adjustment, net income came in at $3.02 per share in the reported quarter, having soared 84% year over year.
In the quarter under review, total revenues of $4.8 billion declined 2.3% year over year, primarily driven by a decrease in premium revenues as well as premium tax revenues. However, the top line missed the Zacks Consensus Estimate by 5.6%.
Quarterly Operational Update
Total operating expenses declined about 14.1% year over year to $4.5 billion. This improvement was attributable to lower general and administrative expenses, premium tax expenses and restructuring and separation costs.
For the second quarter, medical care cost decreased 14.2% year over year to $3.8 billion.
A persistent rise in debt burden induced Molina Healthcare’s interest expenses to escalate approximately 18.5% year over year to $32 million.
Financial Update
As of Jun 30, 2018, Molina Healthcare’s cash and cash equivalents increased 6.5% from the level at year-end 2017 to $3.3 billion.
Total assets grew nearly 3.5% to $8.7 billion from the tally at 2017 end.
The company’s shareholder equity improved 24% from the figure at year-end 2017 to $1.6 billion.
Net cash used in operating activities totaled $80 million for the second quarter of 2018, which surged 70% from $47 million for the same period in 2017.
2018 Guidance Revised
Adjusted net income per share is expected in the band of $7.15-7.35 (up from the prior guidance of $4.24-$4.74).
Molina Healthcare is likely to generate total revenues of $18.8 billion in 2018 (up from the previous projection of $18.7 billion).
Medical Care Costs of $15.2 billion are projected to be incurred in 2018 (down from the earlier forecast of $15.4 billion).
The company estimates to incur General and administrative expenses of $1.4 billion in 2018 (in line with the preliminary estimate).
Net income is anticipated within $471-$484 million (up from the past prediction of $272-$306 million).
The company’s EBITDA is anticipated to range between $968-$985 million (up from the prior outlook of $724-$768 million).
Performance of Other Health Maintenance Organizations
Among other players from the industry having reported second-quarter earnings so far, the bottom line of Anthem, Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) beat the respective Zacks Consensus Estimate.
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Molina Healthcare (MOH) Tops Q2 Earnings, Updates '18 View
Molina Healthcare, Inc.’s (MOH - Free Report) second-quarter 2018 adjusted earnings of $2.25 per share surpassed the Zacks Consensus Estimate of $1.09 cents by a whopping 106.4%. This upside was driven by managed care fundamentals, margin recovery and effective performance management. The bottom line also came in against the prior-year quarter’s loss of 1 cent.
Molina Healthcare, Inc Price and EPS Surprise
Molina Healthcare, Inc Price and EPS Surprise | Molina Healthcare, Inc Quote
Primarily related to theMarketplace risk adjustment, net income came in at $3.02 per share in the reported quarter, having soared 84% year over year.
In the quarter under review, total revenues of $4.8 billion declined 2.3% year over year, primarily driven by a decrease in premium revenues as well as premium tax revenues. However, the top line missed the Zacks Consensus Estimate by 5.6%.
Quarterly Operational Update
Total operating expenses declined about 14.1% year over year to $4.5 billion. This improvement was attributable to lower general and administrative expenses, premium tax expenses and restructuring and separation costs.
For the second quarter, medical care cost decreased 14.2% year over year to $3.8 billion.
A persistent rise in debt burden induced Molina Healthcare’s interest expenses to escalate approximately 18.5% year over year to $32 million.
Financial Update
As of Jun 30, 2018, Molina Healthcare’s cash and cash equivalents increased 6.5% from the level at year-end 2017 to $3.3 billion.
Total assets grew nearly 3.5% to $8.7 billion from the tally at 2017 end.
The company’s shareholder equity improved 24% from the figure at year-end 2017 to $1.6 billion.
Net cash used in operating activities totaled $80 million for the second quarter of 2018, which surged 70% from $47 million for the same period in 2017.
2018 Guidance Revised
Adjusted net income per share is expected in the band of $7.15-7.35 (up from the prior guidance of $4.24-$4.74).
Molina Healthcare is likely to generate total revenues of $18.8 billion in 2018 (up from the previous projection of $18.7 billion).
Medical Care Costs of $15.2 billion are projected to be incurred in 2018 (down from the earlier forecast of $15.4 billion).
The company estimates to incur General and administrative expenses of $1.4 billion in 2018 (in line with the preliminary estimate).
Net income is anticipated within $471-$484 million (up from the past prediction of $272-$306 million).
The company’s EBITDA is anticipated to range between $968-$985 million (up from the prior outlook of $724-$768 million).
Zacks Rank
Molina Healthcare carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Health Maintenance Organizations
Among other players from the industry having reported second-quarter earnings so far, the bottom line of Anthem, Inc. , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) beat the respective Zacks Consensus Estimate.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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