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Molina Healthcare's (MOH) Q4 Earnings Surpass, Decline Y/Y

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Molina Healthcare, Inc.’s MOH fourth-quarter 2019 adjusted earnings of $2.73 per share surpassed the Zacks Consensus Estimate by 4.2% on the back of declining expenses. However, the bottom line fell 29.6% year over year, mainly due to lower revenues.

Also, total revenues of $4.2 billion came almost in line with the Zacks Consensus Estimate. However, the top line was down 8.4% year over year, mainly due to loss of Medicaid membership.

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

Quarterly Operational Update

The company’s net income totaled $168 million, down 16.4% year over year.

Total operating expenses decreased 7.1% year over year to $4 billion. This improvement was attributable to lower Medical care costs and null cost of service revenues.

For the quarter under review, medical care cost was down 6.1% year over year to nearly $3.5 billion.

Molina Healthcare’s interest expenses dropped 16.7% year over year to $20 million owing to constant repayment of convertible notes.

Total membership by Government Program for 2019 stands at 3.3 billion, down 12.8% year over year.

Financial Update

As of Dec 31, 2019, Molina Healthcare’s cash and cash equivalents saw a reduction of 13.2% to $2.4 billion from the level at 2018 end.

Total assets fell 5.1% from the level at 2018 end to $6.7 billion.

The company’s shareholder equity improved nearly 19% from the figure at 2018 end to $1.9 billion.

For 2019, net cash flow from operating activities stands at $427 million against 2018’s net cash outflow of $314 million.

Share Repurchase and Dividend Update

In December 2019, the company’s board of directors authorized a share buyback plan of up to $500 million. During the fourth quarter, Molina Healthcare received $305 million of dividends from regulated health plan subsidiaries.

2020 Guidance

Following fourth-quarter results, the company issued its 2020 outlook. It now expects earnings in the range of $11.20-$11.70 per share.

It also projects premium revenue growth of 7.4%.

For the current year, the company anticipates its premium revenues to be $17.4 billion and total revenues to be $18.3 billion. Total membership of the company is predicted to be 3.4 million.

Full-Year Update

Net income for the year ended Dec 31, 2019 increased 4.2% year over year to $737 million. Revenues for the year totaled $16.8 billion, down 11% year over year.

Zacks Rank

Molina Healthcare carries a Zacks Rank #3 (Hold).  You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Releases From the Medical Sector

Among other players from the medical sector having already reported fourth-quarter earnings, the bottom-line results of UnitedHealth Group Incorporated UNH, Anthem Inc. ANTM topped the respective Zacks Consensus Estimate while that of Centene Corporation CNC missed the same.

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