Molina Healthcare's (MOH) Q3 Earnings Beat, Increase Y/Y

Zacks Equity Research
·3-min read

Molina Healthcare, Inc.’s MOH third-quarter 2020 adjusted earnings of $3.36 per share beat the Zacks Consensus Estimate by 53.4%. Moreover, the bottom line improved 20% year over year on the back of higher revenues.

Total revenues of $5 billion beat the consensus mark by 3.7%.
Moreover, the top line rose 18.3% year over year on increased membership.

The company projects that the impact of COVID-19 pandemic was negligible to slightly positive on its performance in the quarter under review.

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 $185 million, up 5.7% year over year.
Total operating expenses increased 18.7% year over year to $4.7 billion. This deterioration was due to higher medical care costs, premium tax expenses and health insurer fees.

Molina Healthcare’s interest expenses climbed 22.7% year over year to $27 million.

Total membership under Government Program at the end of the third quarter stands at 4 billion, up 20.5% year over year.

Financial Update

As of Sep 30, 2020, Molina Healthcare’s cash and cash equivalents surged 30.3% to $3.2 billion from the level at 2019 end.

Total assets rose 16.2% from the level at 2019 end to $7.9 billion.

The company’s shareholder equity improved nearly 12.3% from the figure at 2019 end to $2.2 billion.

As of Sep 30, 2020, net cash flow provided by operating activities stands at $591 million, up 48.5% year over year.

Business Update

In September, Molina Healthcare inked a deal to acquire substantially all the assets of Affinity Health Plan. It also closed the buyout of certain assets of Passport Health Plan, Inc. in Kentucky.

2020 and 2021 Guidance

Following third-quarter results, the company reaffirmed its outlook for the current year.

It still expects earnings in the range of $11.20-$11.70 per share. However, it raised its 2020 total revenue outlook to $19.6 billion, up from its prior projection of $18.8 billion.

Its core performance is anticipated to stay solid through the fourth quarter of 2020.

The company also reaffirmed its previously announced 2021 premium outlook of $21.5 billion.

Zacks Rank

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

Other Medical Sector Releases

Of the medical sector players that reported third-quarter results so far, earnings of UnitedHealth Group Incorporated UNH and Centene Corporation CNC beat the respective Zacks Consensus Estimate while that of HCA Healthcare, Inc. HCA missed the same.

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