With nearly $200M gain in Q1, Molina raises guidance

The positive business performance for the Long Beach, California-based insurer continues at the start of 2019.

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KEY TAKEAWAYS

While total revenues and premium revenues fell, many other metrics improved for the health insurer.

Molina Healthcare’s net income rose to nearly $200 million in Q1, a $91 million bounce year-over-year, prompting the company to boost its year-end guidance

CEO Joe Zubretsky said that the Q1 results “sustain the attractive margin position we had built in 2018.”

Molina Healthcare’s net income rose to nearly $200 million in Q1, a $91 million bounce year-over-year, prompting the health insurer to boost its year-end guidance, according to its latest earnings report released Monday afternoon.

Though premium revenues fell by 9% year-over-year to $4 billion, the company stated that those metrics were in line with expectations, citing the loss of the New Mexico Medicaid contract and a resizing of its existing contract in Florida.

The Long Beach, California-based company’s instead focused on the increase in net income per diluted share, which rose from $1.64 in Q1 2018 to $2.99 in Q1 2019, spurring Molina to raise its earnings guidance to a range between $10.50 and $11 per share.

C-SUITE PERSPECTIVE:

“These results are a testament to the achievability of the second phase of our strategy, which is to sustain the attractive margin position we had built in 2018,” Joe Zubretsky, CEO of Molina Healthcare, said in a statement. “While certainly not conclusive, our first quarter results validate our position that durable financial and operational improvement can and should allow us to sustain these margins, all while we begin to grow the top line again.”

Molina did experience a decline in total revenue, falling from $4.6 billion to $4.1 billion, though total operating expenses fell by nearly $600 million year-over-year and operating income jumped $58 million over the same period.

The company’s medical care ratio also showed improvement, reporting at 85.3% in Q1 compared to 86.1% in Q1 2018.

ADDITIONAL MOLINA Q1 EARNINGS REPORT HIGHLIGHTS:

• The insurer’s net income margin totalled 4.8% for Q1, up from 2.3% this time last year.
• For Q1, Molina also repaid $46 million in aggregate principal amount of its 1.125% convertible notes.
• This action was accompanied by a $128 million repayment on the same notes in April.

https://www.healthleadersmedia.com/finance/nearly-200m-gain-q1-molina-raises-guidance