Revenues, Income, and EPS Fall for Molina Healthcare

Despite the weak financials, the Long Beach, California-based insurer is again raising its year-end guidance.

Molina Healthcare experienced declines in three major financial metrics during Q3 according to the company's latest earnings report released Tuesday afternoon. 

The Long Beach, California–based insurer's premium revenues totaled just over $4 billion, a 5.8% decrease year-over-year; net income fell by $22 million from $197 million to $175 million; and its earnings per diluted share (EPS) slipped down to $2.75. 

However, as it has done in previous quarters marked by financial declines, Molina's leadership is raising the company's year-end guidance. The insurer now projects its full-year EPS in a range between $11.30 to $11.55, eclipsing the previous guidance of $11.20 to $11.50.

Related: Revenues Decrease But Molina Healthcare Raises Guidance

Year-end premium revenue is still expected to total $16.1 billion and Molina's net income is expected to place in a range of $725 million to $740 million. 

C-SUITE PERSPECTIVE: 

"We are pleased with our performance this quarter as we sustained our margin profile, produced significant excess capital, and increased our full year 2019 guidance," Joe Zubretsky, CEO of Molina Healthcare, said in a statement. "We have accomplished this in the backdrop of commencing our pivot to growth."

For the first nine months of 2019, Molina finished with $389 million in operating cash flows, which represented a performance improvement for the company compared to this time last year due to "normal fluctuations of working capital."

Related: J. Mario Molina Named Founding Dean for New KGI School of Medicine in California

Molina's most significant move in Q3 came in early October when the company announced plans to acquire YourCare Health Plan, a Buffalo, New York–based health plan. Molina expects the deal, which will add 46,000 Medicaid members, to close in Q1 2020.

Related: Molina to Buy New York Medicaid Plan

ADDITIONAL MOLINA Q3 EARNINGS REPORT HIGHLIGHTS:  

• The insurer's net income margin was 4.1% for Q3, down from 4.2% in Q3 2018.
• The company's medical care ratio once again declined, falling from 87.4% in Q3 2018 to 86.3%.
• For Q3, the company received $430 million in dividends from health plan subsidiaries.
• Part of Molina's EPS decline was due to a $2 million charge on the repayment of convertible notes. 

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

Editor's note: This story was updated on October 31.