Earnings Overview#
Molina Healthcare, Inc. (NYSE:MOH) has released its first quarter earnings, reporting adjusted earnings per share of $2.35. This figure exceeded analyst expectations of $2.17. However, the company’s revenue of $10.8 billion did not meet the consensus estimate of $10.87 billion, leading to a modest increase in shares by 2.2% following the announcement.
Revenue and Membership Changes#
The company experienced a 4% decline in premium revenue year-over-year, totaling $10.2 billion. This decrease is attributed to a reduction in Medicaid membership due to market changes and the expiration of a contract in Virginia, as well as lower enrollment in the Marketplace, which is a platform for purchasing health insurance.
Future Guidance#
Molina reaffirmed its guidance for full-year 2026, projecting approximately $42 billion in premium revenue and adjusted earnings of at least $5.00 per diluted share. However, these figures are below analyst expectations, which forecast $44.3 billion in revenue and earnings of $5.03 per share.
Medical Care Ratios and Net Income#
The consolidated medical care ratio (MCR) for the first quarter was 91.1%, an increase from 89.2% in the same period last year. The MCR for Medicaid was 92.0%, while Medicare stood at 89.8%. The Marketplace MCR was reported at 84.0%, but when adjusting for previous year impacts, the underlying MCR was 79.5%.
Additionally, the company's GAAP net income fell significantly to $0.27 per diluted share, a 95% decline year-over-year, mainly due to a $93 million impairment charge related to its planned exit from the Medicare Advantage-Part D product for 2027. On a positive note, operating cash flow surged to $1.08 billion, a significant increase from $190 million in the prior year, largely due to the timing of government receivables and payables.