Molina Healthcare, Inc.’s (MOH - Free Report) fourth-quarter 2019 adjusted earnings of $2.73 per share surpassed the Zacks Consensus Estimate by 4.2% on the back of declining expenses. However, the bottom line fell 29.6% year over year, mainly due to lower revenues.
Also, total revenues of $4.2 billion came almost in line with the Zacks Consensus Estimate. However, the top line was down 8.4% year over year, mainly due to loss of Medicaid membership.
Quarterly Operational Update
The company’s net income totaled $168 million, down 16.4% year over year.
Total operating expenses decreased 7.1% year over year to $4 billion. This improvement was attributable to lower Medical care costs and null cost of service revenues.
For the quarter under review, medical care cost was down 6.1% year over year to nearly $3.5 billion.
Molina Healthcare’s interest expenses dropped 16.7% year over year to $20 million owing to constant repayment of convertible notes.
Total membership by Government Program for 2019 stands at 3.3 billion, down 12.8% year over year.
As of Dec 31, 2019, Molina Healthcare’s cash and cash equivalents saw a reduction of 13.2% to $2.4 billion from the level at 2018 end.
Total assets fell 5.1% from the level at 2018 end to $6.7 billion.
The company’s shareholder equity improved nearly 19% from the figure at 2018 end to $1.9 billion.
For 2019, net cash flow from operating activities stands at $427 million against 2018’s net cash outflow of $314 million.
Share Repurchase and Dividend Update
In December 2019, the company’s board of directors authorized a share buyback plan of up to $500 million. During the fourth quarter, Molina Healthcare received $305 million of dividends from regulated health plan subsidiaries.
Following fourth-quarter results, the company issued its 2020 outlook. It now expects earnings in the range of $11.20-$11.70 per share.
It also projects premium revenue growth of 7.4%.
For the current year, the company anticipates its premium revenues to be $17.4 billion and total revenues to be $18.3 billion. Total membership of the company is predicted to be 3.4 million.
Net income for the year ended Dec 31, 2019 increased 4.2% year over year to $737 million. Revenues for the year totaled $16.8 billion, down 11% year over year.
Molina Healthcare carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Releases From the Medical Sector
Among other players from the medical sector having already reported fourth-quarter earnings, the bottom-line results of UnitedHealth Group Incorporated (UNH - Free Report) , Anthem Inc. (ANTM - Free Report) topped the respective Zacks Consensus Estimate while that of Centene Corporation (CNC - Free Report) missed the same.
Zacks Top 10 Stocks for 2020
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2020?
Last year's 2019 Zacks Top 10 Stocks portfolio returned gains as high as +102.7%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2020 today >>