Molina Healthcare, Inc. (MOH - Free Report) reported first-quarter 2018 adjusted earnings of $1.71 per share, which surpassed the Zacks Consensus Estimate of 81 cents by a whopping 111.1%. The bottom line also improved 16.3% from the year-ago quarter.
Including net impact of the reconciliation of 2017 Marketplace cost-sharing reduction (CSR) subsidies, restructuring costs and loss on debt extinguishment, net income came in at $1.64 per share in the reported quarter, having improved 19.7% from the year-ago period. This upside was attributable to an improved medical and administrative cost efficiency.
In the quarter under review, total revenues of $4.6 billion declined 5.3% year over year, primarily driven by a decrease in premium revenues as well as premium tax revenues. Also, the top line missed the Zacks Consensus Estimate by 1.6%.
Quarterly Operational Update
For the first quarter, total operating expenses declined about 8.3% year over year to $4.4 billion. This improvement was attributable to lower medical care costs, cost of service revenues, general and administrative expenses, premium tax expenses and depreciation and amortization.
For the first quarter, medical care cost declined 9.5% year over year to $3.7 billion.
A persistently rising debt burden induced Molina Healthcare’s interest expenses to increase approximately 26.9% year over year to $33 million.
Financial Update
As of Mar 31, 2018, Molina Healthcare’s cash and cash equivalents increased 17% from year-end 2017 to $3.7 billion.
Total assets grew nearly 7.8% from the end of 2017 to $9.1 billion.
The company’s shareholder equity improved 16.2% from year-end 2017 to $1.6 billion.
Net cash provided by operating activities totaled $394 million for the first three months of 2018, which plunged 45.2% from $719 million for the same period in 2017.
2018 Guidance Revised
Adjusted net income per share is expected within the band of $4.24-$4.74 (up from the prior guidance of $3.23-$3.73).
Molina Healthcare is likely to generate total revenues of $18.7 billion in 2018 (down from the previous projection of $18.8 billion).
Medical Care Costs of $15.4 billion are projected to be incurred in 2018 (down from the earlier forecast of $15.6 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 $272-$306 million (up from the past prediction of $202-$236 million).
The company’s EBITDA is likely to range between $724 million and $768 million (up from the prior preliminary outlook of $632-$676 million).
Zacks Rank
Molina Healthcare sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Health Maintenance Organizations
Among other players from the industry having reported first-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, Inc. (MOH - Free Report) reported first-quarter 2018 adjusted earnings of $1.71 per share, which surpassed the Zacks Consensus Estimate of 81 cents by a whopping 111.1%. The bottom line also improved 16.3% from the year-ago quarter.
Including net impact of the reconciliation of 2017 Marketplace cost-sharing reduction (CSR) subsidies, restructuring costs and loss on debt extinguishment, net income came in at $1.64 per share in the reported quarter, having improved 19.7% from the year-ago period. This upside was attributable to an improved medical and administrative cost efficiency.
In the quarter under review, total revenues of $4.6 billion declined 5.3% year over year, primarily driven by a decrease in premium revenues as well as premium tax revenues. Also, the top line missed the Zacks Consensus Estimate by 1.6%.
Quarterly Operational Update
For the first quarter, total operating expenses declined about 8.3% year over year to $4.4 billion. This improvement was attributable to lower medical care costs, cost of service revenues, general and administrative expenses, premium tax expenses and depreciation and amortization.
For the first quarter, medical care cost declined 9.5% year over year to $3.7 billion.
A persistently rising debt burden induced Molina Healthcare’s interest expenses to increase approximately 26.9% year over year to $33 million.
Financial Update
As of Mar 31, 2018, Molina Healthcare’s cash and cash equivalents increased 17% from year-end 2017 to $3.7 billion.
Total assets grew nearly 7.8% from the end of 2017 to $9.1 billion.
The company’s shareholder equity improved 16.2% from year-end 2017 to $1.6 billion.
Net cash provided by operating activities totaled $394 million for the first three months of 2018, which plunged 45.2% from $719 million for the same period in 2017.
2018 Guidance Revised
Adjusted net income per share is expected within the band of $4.24-$4.74 (up from the prior guidance of $3.23-$3.73).
Molina Healthcare is likely to generate total revenues of $18.7 billion in 2018 (down from the previous projection of $18.8 billion).
Medical Care Costs of $15.4 billion are projected to be incurred in 2018 (down from the earlier forecast of $15.6 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 $272-$306 million (up from the past prediction of $202-$236 million).
The company’s EBITDA is likely to range between $724 million and $768 million (up from the prior preliminary outlook of $632-$676 million).
Zacks Rank
Molina Healthcare sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Performance of Other Health Maintenance Organizations
Among other players from the industry having reported first-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.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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