Yahoo Finance Molina Healthcare (MOH) Q1 Earnings Beat on Growing Membership
Molina Healthcare, Inc. MOH reported first-quarter 2024 adjusted earnings per share (EPS) of $5.73, which beat the Zacks Consensus Estimate by 5%. However, the bottom line dipped 1.4% year over year.
Total revenues amounted to $9.9 billion, which improved 21.9% year over year. Also, the top line outpaced the consensus mark by 4.3%.
The quarterly results were aided by membership growth in each of the business lines of Molina Healthcare. This, in turn, drove premiums, the most significant contributor to a health insurer’s top line. Strong investment income also contributed to the upside. However, the upside was partly offset by escalating medical care costs.
Molina Healthcare, Inc. Price, Consensus and EPS Surprise
Molina Healthcare, Inc. price-consensus-eps-surprise-chart | Molina Healthcare, Inc. Quote
Quarterly Operational Update
Premium revenues of $9.5 billion climbed 21% year over year in the quarter under review, higher than the Zacks Consensus Estimate of $9.2 billion and our estimate of $9 billion. The improvement stemmed from contract wins, buyouts and an expanding nationwide footprint, partly offset by Medicaid redeterminations.
Investment income soared 52.1% year over year to $108 million and beat the consensus mark of $107.3 million as well as our estimate of $96.2 million.
Total operating expenses of $9.5 billion increased 23.5% year over year due to a significant rise in medical care costs coupled with higher general and administrative expenses and premium tax expenses.
Adjusted general and administrative expense ratio deteriorated 10 bps year over year to 7.1% in the first quarter. Interest expenses of $27 million slid 3.6% year over year.
Molina Healthcare’s adjusted net income dipped 0.9% year over year to $334 million but surpassed our estimate of $303.3 million.
The consolidated medical care ratio (medical costs as a percentage of premium revenues), or MCR, was 88.5% in the quarter under review. The metric deteriorated 140 bps year over year but came higher than the consensus mark of 88.3%. However, the figure was lower than our estimate of 88.6%.
As of Dec 31, 2023, total membership advanced 9% year over year to around 5.7 million, which beat the Zacks Consensus Estimate of 5.5 million and our estimate of 5.6 million. The health insurer witnessed year-over-year increases in customers within its Medicaid, Medicare and Marketplace businesses.
Financial Update (as of Mar 31, 2024)
Molina Healthcare exited the first quarter with cash and cash equivalents of $4.5 billion, which declined 6.9% from the 2023-end level. Total assets of $15.5 billion rose 4.2% from the figure at 2023 end.
Long-term debt remained flat at $2.2 billion from the 2023-end level.
Total stockholders’ equity of $4.5 billion advanced 6.6% from the figure at 2023 end.
Net cash provided by operating activities amounted to $214 million in the quarter under review, which plunged 76.6% year over year. The significant decline was due to differences in timing in government receivables and payables.
2024 Guidance Reiterated
Management anticipates premium revenues at around $38 billion, which indicates an improvement of around 17% from the 2023 reported figure.
Total revenues are estimated at $39.6 billion in 2024, suggesting 16.1% growth from the 2023 figure.
Adjusted EPS is forecasted at a minimum of $23.50 this year, which implies a rise of roughly 13% from the 2023 figure.
Adjusted net income is projected to be $1.4 billion while GAAP net income is expected at $1.3 billion for 2024.
Total membership is estimated to be 5.7 million in 2024 end, which indicates growth of 14.7% from the 2023 figure. Consolidated MCR is likely to stay at 88.2%.
Zacks Rank
Molina Healthcare currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported first-quarter 2024 results so far, the bottom-line results of UnitedHealth Group Incorporated UNH, Elevance Health, Inc. ELV and Humana Inc. HUM beat the respective Zacks Consensus Estimate.
UnitedHealth Group reported first-quarter 2024 adjusted EPS of $6.91 per share, which beat the Zacks Consensus Estimate by 4.2%. The bottom line rose 10.4% year over year. Revenues amounted to $99.8 billion, which improved 8.6% year over year. The top line outpaced the consensus mark of $99.2 billion.
UNH’s MCR deteriorated 210 bps year over year to 84.3% in the first quarter. Its health benefits business, UnitedHealthcare, generated revenues of $75.4 billion in the first quarter. The figure rose 7% year over year. The unit served 51.5 million people as of Mar 31, 2024, which decreased 2.7% year over year. Revenues in the Optum business line were $61.1 billion, which climbed 12.9% year over year, while the segment ‘s earnings from operations declined 5.4% year over year to $3.5 billion.
Elevance Health’s first-quarter 2024 adjusted earnings of $10.64 per share surpassed the Zacks Consensus Estimate by 0.9%. The bottom line climbed 12.5% year over year. Operating revenues rose 0.9% year over year to almost $42.3 billion in the quarter under review. However, the top line missed the consensus mark by 0.4%.
As of Mar 31, 2024, ELV’s medical membership was around 46.2 million, which declined 4% year over year. Premiums of $35.7 billion declined 0.5% year over year, while product revenues climbed 11.9% year over year to $4.5 billion. Net investment income of $465 million improved 20.2% year over year. The total operating margin improved 30 bps year over year to 7.1% in the first quarter. Operating revenues of the Carelon segment increased 5% year over year to $12.1 billion
Humana delivered first-quarter 2024 earnings of $7.23 per share, beating the Zacks Consensus Estimate by 20.1%. However, the figure declined from earnings of $9.38 per share in the year-ago period. Adjusted revenues rose 14.3% from the previous year, reaching $29.3 billion. Also, the top line exceeded the consensus estimate by 2.6%.
Total premiums of HUM amounted to $28.3 billion, which improved 10.6% year over year. Services revenues increased 6.3% year over year to almost $1.1 billion. Investment income of $288 million increased 49.2% year over year. The benefits expense ratio was 88.9%, which deteriorated 340 bps year over year. The Insurance segment’s adjusted revenues rose 10.8% year over year to $28.7 billion. As of Mar 31, 2024, the total medical membership of the segment was 16.17 million. The figure dipped 5.7% year over year.
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