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Molina Healthcare (MOH) Tops Q2 Earnings, Updates '18 View

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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).

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. (ANTM - Free Report) , Centene Corporation (CNC - Free Report) and UnitedHealth Group Incorporated (UNH - Free Report) beat the respective Zacks Consensus Estimate.

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