Molina Healthcare Shares Surge on Q2 Earnings and Revenue Beat

LONG BEACH, Calif. – Molina Healthcare, Inc. (NYSE: NYSE:) reported a robust second quarter for 2024, with adjusted earnings per diluted share (EPS) of $5.86, surpassing the analyst consensus of $5.65. The company’s revenue also exceeded expectations, reaching $9.88 billion against a consensus estimate of $9.76 billion. Following the announcement, shares of Molina Healthcare jumped by 9%, indicating a strong positive market response to the earnings and revenue beat.

The healthcare provider saw a 17% increase in premium revenue year-over-year (YoY) to approximately $9.4 billion for the second quarter. This growth was attributed to new contract wins, acquisitions, and expansions within its existing markets, though partially offset by the impact of Medicaid redeterminations. Despite this, GAAP net income per diluted share decreased by 3% YoY to $5.17. However, the adjusted net income per diluted share saw a 4% increase YoY, reflecting the company’s solid operational performance and effective management of medical costs.

Molina Healthcare’s consolidated Medical Care Ratio (MCR) stood at 88.6%, with the company maintaining a focus on managing medical costs. The Medicaid MCR was reported at 90.8%, influenced by a one-time retroactive premium adjustment and new plan expansions. Excluding these factors, the Medicaid MCR was approximately 89.3%. The Medicare MCR at 84.9% and Marketplace MCR at 71.6% both performed better than the company’s expectations, thanks to favorable risk adjustment results and benefit adjustments.

President and CEO Joseph Zubretsky expressed satisfaction with the quarter’s performance, highlighting the strong contributions from Medicaid, Medicare, and Marketplace businesses. “We have successfully navigated the unprecedented redetermination process, and these highly attractive businesses provide the foundation for near and long-term sustainable profitable growth,” Zubretsky said.

Looking ahead, Molina Healthcare reaffirmed its full-year 2024 guidance, projecting premium revenue of around $38 billion and an adjusted EPS of at least $23.50. This guidance indicates a 13% growth over the full year 2023, despite pressures experienced in Medicaid during the second quarter.

The company expects the Medicaid challenges to be offset by higher net investment income and the extension of contracts in Virginia and Florida in the latter half of the year. However, the company’s full-year revenue guidance falls short of the analyst consensus of $39.7 billion, while its EPS guidance is slightly above the consensus of $23.34.

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