Molina Healthcare Inc. (MOH) reported fourth-quarter 2014 net income from continuing operations of 69 cents per share, handily beating the Zacks Consensus Estimate of 60 cents per share.
Operational Update
Total revenue in the reported quarter climbed 64.2% to $2.8 billion. Revenues were in line with the Zacks Consensus Estimate. The year-over-year upside in revenues was mainly driven by participation in the Medicaid programs that cover long-term services and supports (LTSS).
Premium revenues improved 62.9% year over year to $2.6 billion, driven by enrollment growth. However, Molina Healthcare’s service revenues decreased 0.7% to $53.6 million.
Further, Molina Healthcare’s investment income rose 23.5% year over year to $2.5 million. Premium tax revenues also increased 105.7% to $91.3 million in the fourth quarter of 2014.
Total operating expenses rose 58.3% year over year to $2.7 billion. The rise stemmed from an increase in general and administrative (G&A) expenses ($204.5 million from $187 million), premium tax expenses ($91.3 million from $44.4 million), depreciation and amortization (D&A) costs ($25.1 million from $20.3 million) and medical care costs ($2.3 billion from $1.4 billion).
Operating income was $33.9 million in the reported quarter, comparing favorably with an operating loss of $9 million in the year-earlier quarter.
Additionally, Molina Healthcare’s interest expenses increased to approximately $14.6 million from $13.8 million in the year-ago quarter. Further, medical care ratio (ratio of medical care costs to premium revenues) deteriorated 70 basis points to 89.4% from 88.7% in the year-ago quarter.
Full-Year Highlights
Molina Healthcare’s 2014 net income from continuing operations of $1.30 per share was ahead of the Zacks Consensus Estimate of $1.21 per share. Earnings also improved from the year-ago earnings of 96 cents per share. This improvement was driven by enhanced administrative cost efficiency, high enrolment and revenues. However, earnings per share were lower than the company guidance. This was mainly due to the reimbursement of the Affordable Care Act’s Health Insurer Fee.
Total revenue in 2014 climbed 47% to $9.7 billion. The year-over-year upside in revenues was mainly driven by participation in the Medicaid programs that cover long-term services and supports (LTSS).
Financial Update
As of Dec 31, 2014, cash and cash equivalents at Molina Healthcare were $1.5 billion, up from $935.9 million at 2013-end. Cash from operations amounted to $1 billion in 2014 against $190.1 million in 2013.
As of Dec 31, 2014, total assets increased to $4.5 billion from $3 billion at 2013-end. Meanwhile, Molina Healthcare’s shareholder equity was $1 billion as of Dec 31, 2014, against $892.9 million as of Dec 31, 2013.
Performance of Other Insurers
Cigna Corp. (CI) reported fourth-quarter 2014 operating net earnings of $1.69 per share, comfortably beating the Zacks Consensus Estimate of $1.65.
Health insurer Aetna Inc. (AET) reported fourth-quarter 2014 earnings of $1.22 per share, in line with the Zacks Consensus Estimate.
Anthem Inc. (ANTM) reported fourth-quarter 2014 adjusted net income of $1.73 per share, beating the Zacks Consensus Estimate of $1.72.
Zacks Rank
Molina Healthcare currently carries a Zacks Rank #3 (Hold).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment