Skip to main content

Analysis

Molina's Net Income and Revenues See Small Improvements

By Jack O'Brien  
   February 11, 2019

The Long Beach, California-based insurer ended 2018 on a positive note with incremental gains and a raised financial outlook for 2019.

Molina Healthcare completed its turnaround 2018 with year-over-year growth in net income and premium revenues, according to its Q4 earnings report released Monday afternoon.

The insurer's net income reached $201 million in Q4, a $4 million increase compared to Q3, while premium revenues rose by $101 million. 

The Long Beach, California-based company attributed its moderate success to its Medicaid markets and favorable rate changes in programs that "include retroactivity back to earlier periods" of last year.

Molina's net income per diluted share was $3.01 per share in Q4 and $10.61 for the entire year. On the basis of its financials report, Molina is issuing an EPS guidance range between $9.25 and $9.75 per share for 2019. 

Related: Molina Healthcare Increases Year-End Guidance Despite Declining Net Income

As with the company's previous earnings reports, the incremental steps taken by Molina have served as improvements over 2017, when the insurer underwent a major reorganization effort.

“Molina Healthcare, Inc.’s turnaround is continuing with positive credit implications," Dean Ungar, vice president of Moody's Investors Service, said in a statement Tuesday. "After a significant loss in 2017, the company posted strong earnings in 2018 with meaningful margin expansion that now compares favorably to its Medicaid-focused peers, along with reduced leverage. We expect positive results to continue into 2019, despite previously disclosed contract losses driven by continued cost savings.”

C-SUITE PERSPECTIVE: 

"We have accomplished much over the last year as we executed the first phase of our margin recovery and sustainability plan," Joe Zubretsky, CEO of Molina Healthcare, said in a statement. "Our full year results are a capstone to a very successful beginning of this margin turnaround and growth story. Our guidance for 2019 reflects continued strength as we sustain our margins while beginning to execute the growth phase of our strategy."

Molina's earnings report gained a favorable reaction from the company's stock price, which jumped 4.3% in after hours trading.  

ADDITIONAL MOLINA Q4 EARNINGS REPORT HIGHLIGHTS:  

  • In Q4 2017, Molina reported a $262 million loss in net income and restructuring costs of $342 million. 
  • The insurer's net income margin totalled 4.3% for Q3 and 3.7% for the year.
  • Molina also repaid $62 million in outstanding debt in Q3, bringing their 2018 total to $759 million.

For complete financial information, review Molina's filing with the Securities and Exchange Commission.

Editor's note: This story has been updated to include commentary from the American Hospital Association.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: KIEV, UKRAINE - Dec 18, 2018: Molina Healthcare company logo seen displayed on smartphone - Image / Editorial credit: IgorGolovniov / Shutterstock.com


Get the latest on healthcare leadership in your inbox.