Molina Healthcare (MOH) Q4 Earnings, Revenues Beat Estimates

Molina Healthcare Inc. (NYSE:MOH) reported first-quarter 2017 adjusted net income per share of $1.47 that surpassed the Zacks Consensus Estimate of 57 cents by 157%. Earnings also skyrocketed 188% year over year.

Operational Update

In the first quarter, total revenue of $4.9 billion beat the Zacks Consensus Estimate by 2.6%. The top line has also grown 13% year over year, primarily due to a 16.3% increase in premium revenues and 22% rise in service revenues. A 55% increase in investment income and other revenues also supported the upside.

For the first quarter, total operating expenses rose 13.3% year over year to $4.8 billion due to higher Medical care costs, increased cost of service revenues, a rise in general and administrative expenses, higher premium tax expenses as well as depreciation and amortization costs.

For the first quarter, Medical care cost increased 14.6% year over year to $4.1 billion.

Continuously rising debt burden resulted in Molina Healthcare’s interest expenses increasing 4% year over year to $26 million in the first quarter.

Financial Update

As of Mar 31, 2017, Molina Healthcare’s cash and cash equivalents increased 13.4% from the year-end 2015 level to $3.2 billion.

Total assets grew 8% from the end of 2016 to $85 billion.

Molina Healthcare’s shareholder equity increased 4.7% from year-end 2016 to $1.7 billion.

Net cash from operating activities totaled $719 million in the first quarter, up from $139 million in the year-ago quarter.

2017 Guidance

For 2017, the company expects earnings per diluted share and adjusted earnings per diluted share of $2.53 and $2.90, respectively. It also revised the 2017 outlook to include the impact of the $75 million acquisition termination fee received in the first quarter of 2017.

Molina Healthcare Inc Price, Consensus and EPS Surprise

Zacks Rank and Performance of Other Insurers

Molina Healthcare currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Among the other firms in the medical sector that have reported first-quarter earnings so far, the bottom line at Aetna Inc. (NYSE:AET) , Humana Inc. (NYSE:HUM) and UnitedHealth Group Inc. (NYSE:UNH) beat their respective Zacks Consensus Estimate.

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