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Molina Healthcare (MOH) Q4 Earnings Beat on Higher Premiums

·4 min read

Molina Healthcare, Inc. MOH reported fourth-quarter 2021 adjusted earnings of $2.88 per share, beating the Zacks Consensus Estimate of $2.82. Also, the bottom line significantly improved from the year-ago loss of 51 cents per share.

Total revenues of $7,409 million beat the consensus mark of $7,126 million. The top line also surged from the year-ago level of $5,235 million.

The strong fourth-quarter results were supported by increased membership and premiums. Lower impact from COVID also aided the results.

Molina Healthcare, Inc Price, Consensus and EPS Surprise

Molina Healthcare, Inc Price, Consensus and EPS Surprise
Molina Healthcare, Inc Price, Consensus and EPS Surprise

Molina Healthcare, Inc price-consensus-eps-surprise-chart | Molina Healthcare, Inc Quote

Operational Update

Premium revenues for the company increased 47.6% year over year to $7,166 million on the back of positive impacts from acquisitions and organic membership growth.

Total operating expenses shot up to $7,218 million for the fourth quarter from $5,144 million a year ago, primarily due to higher medical care costs, general and administrative expenses as well as premium tax expenses. Molina Healthcare’s interest expenses remained flat year over year at $30 million.

The company’s net income totaled $103 million, up from $34 million a year ago.

Medical care ratio (medical costs as a percentage of premium revenue) for the fourth quarter was 88.8%, down from 90.8% in the year-ago period.

Total membership at fourth quarter-end increased 29% year over year to 5.2 million, reflecting improving business.

Financial Update (as of Dec 31, 2021)

Molina Healthcare’s cash and cash equivalents rose to $4,438 million at fourth quarter-end from $4,357 million at third quarter-end. Total assets rose to $12,209 million from $11,033 million at September quarter-end.

Long-term debt at fourth quarter-end was $2,173 million, marginally up sequentially from $2,130 million.

The company’s shareholder equity improved to $2,630 million sequentially from $2,518 million.

Net cash flow provided by operating activities was $2,119 million in 2021, up from $1,898 million a year ago.

Guidance

Molina Healthcare expects its 2022 business to witness reduced impacts from COVID. Strong Medicare and Medicaid performance will buoy results.

Premium revenues for 2022 are projected to be $28.5 billion, indicating a rise from the 2021 level of $26.9 billion. Total revenues for 2022 are anticipated to be $29.5 billion, suggesting an increase from $27.8 billion in 2021.

Adjusted earnings per share for 2022 are expected at $17, implying growth from $13.54 in 2021.

Total membership at 2022-end is anticipated at 4.5 million, pointing to a decline from the 2021 level of 5.2 million. Medical care ratio for 2022 is expected at 88%, calling for a decrease from 88.3% in 2021.

Zacks Rank & Key Picks

Molina Healthcare currently has a Zacks Rank #3 (Hold). Some better-ranked players in the Medical space include The Joint Corp. JYNT, The Ensign Group, Inc. ENSG and Inovio Pharmaceuticals, Inc. INO, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Headquartered in Scottsdale, AZ, The Joint Corp. operates chiropractic clinics in the United States. The Zacks Consensus Estimate for JYNT’s earnings suggests an increase of 80% year over year. The consensus mark for The Joint Corp.’s revenues for the current year indicates a 38% year-over-year rise.

Ensign is a provider of services like skilled nursing, senior living, rehabilitative and others. Based in San Juan Capistrano, CA, Ensign Group has been taking up several initiatives to efficiently deploy capital. The Zacks Consensus Estimate for ENSG’s bottom line indicates 8.6% year-over-year growth. The consensus mark for revenues indicates a rise of 10.3% year over year.

Inovio Pharmaceuticals develops and focuses on DNA medicines. The consensus mark for Plymouth Meeting, PA-based INO’s bottom line for 2022 implies a jump of 26.6% year over year. The consensus mark for Inovio Pharmaceuticals’ top line for 2022 is pegged at $81.8 million, indicating a significant jump from a year ago.


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