MOH
Molina Healthcare, INC
NYSE
8-K: Molina Healthcare Reports Strong 2024 Results, Issues Optimistic 2025 Guidance
Sentiment:
Earnings Release
5 February 2025 4:18 PM
Molina Healthcare announces positive fourth quarter and year-end 2024 financial results, along with an encouraging full-year 2025 revenue and earnings guidance.
Better than expected
The company's full year 2024 GAAP net income increased by 9% year-over-year.
The company's full year 2024 adjusted net income increased by 8% year-over-year.
The Marketplace MCR for the full year 2024 was 75.4%, better than the company's expectations.
Summary
- Molina Healthcare reported GAAP earnings per diluted share of $4.44 and adjusted earnings per diluted share of $5.05 for the fourth quarter of 2024.
- For the full year 2024, GAAP earnings per diluted share were $20.42, and adjusted earnings per diluted share were $22.65.
- Premium revenue for the full year 2024 reached approximately $38.6 billion, a 19% increase year-over-year.
- The company served approximately 5.5 million members as of December 31, 2024.
- Molina issued its full year 2025 earnings guidance, expecting premium revenue of approximately $42 billion and adjusted earnings of at least $24.50 per diluted share.
- The 2025 guidance includes approximately $1.00 per diluted share of implementation costs for recent Medicaid and Medicare Duals contract wins scheduled to commence in 2026.
- New store embedded earnings are now at $7.75 per diluted share, reflecting recent Medicaid and Medicare Duals contract wins.
- Operating cash flow for the year ended December 31, 2024, was $644 million, compared to $1,662 million for the year ended December 31, 2023.
- The consolidated Medical Care Ratio (MCR) for the full year 2024 was 89.1%.
Sentiment
Score: 8
Explanation: The document presents a positive outlook with strong financial results and optimistic guidance, indicating a favorable sentiment.
Positives
- Molina Healthcare experienced significant revenue growth, with premium revenue increasing by 19% year-over-year.
- The company's earnings per share also saw a healthy increase, with GAAP net income rising by 9% and adjusted net income by 8%.
- Molina's 2025 guidance indicates continued growth, with expected premium revenue of $42 billion and adjusted EPS of at least $24.50.
- The Marketplace MCR for the full year 2024 was 75.4%, better than the company's expectations, reflecting strong operating performance.
- The company repurchased 1.7 million shares for $500 million in Q4 2024, indicating confidence in its financial position.
Negatives
- Operating cash flow decreased from $1,662 million in 2023 to $644 million in 2024, primarily due to timing differences in government receivables and payables.
- The Medicaid MCR for the full year 2024 was 90.3%, with approximately 30 basis points due to Medicaid new store plans and approximately 20 basis points due to a premium rate reduction retroactive to 2023.
- The Medicare MCR for the full year 2024 was 89.1%, which primarily reflects higher-than-expected utilization, partially offset by benefit adjustments implemented for 2024.
Risks
- The company's future performance is subject to numerous known and unknown risks and uncertainties, as detailed in their SEC filings.
- Medicaid redeterminations could impact premium revenue.
- Higher-than-expected utilization in the Medicare segment could affect profitability.
- Implementation costs for new contracts could impact earnings in 2025.
Future Outlook
Molina Healthcare anticipates premium revenue of approximately $42 billion for the full year 2025 and adjusted earnings of at least $24.50 per diluted share, representing 8% growth over the full year 2024.
Management Comments
- Joseph Zubretsky, President and Chief Executive Officer, stated that he is very pleased that 2024 revenue growth exceeded long-term targets and that consolidated pre-tax margins were within the long-term target range.
- Management remains confident in their ability to achieve their long-term financial targets.
Industry Context
Molina's focus on Medicaid and Medicare programs aligns with the growing demand for managed healthcare services within these sectors. The company's expansion through contract wins and acquisitions positions it to capitalize on these trends.
Comparison to Industry Standards
- Molina's MCR of 89.1% is comparable to other managed care companies focused on government-sponsored healthcare programs.
- Companies like Centene and UnitedHealth Group also operate in similar markets and have similar metrics.
- Molina's growth strategy of acquiring smaller regional players is a common practice in the industry to expand market share and geographic reach.
Stakeholder Impact
- Shareholders can expect continued growth and profitability based on the company's guidance.
- Employees may benefit from the company's expansion and success.
- Customers (members) can expect continued access to managed healthcare services.
- The company's performance impacts its relationships with suppliers and government agencies.
Next Steps
- Management will host a conference call and webcast on February 6, 2025, to discuss the results.
- The company will continue to focus on realizing new store embedded earnings and executing on long-term growth opportunities.
Key Dates
- December 31, 2023: End of fiscal year 2023; comparative financial data provided.
- December 31, 2024: End of fiscal year 2024; financial results reported.
- February 5, 2025: Date of the earnings release and 8-K filing.
- February 6, 2025: Date of the conference call to discuss the results.
- February 13, 2025: End date for telephonic replay of the conference call.
- 2026: Expected commencement of recent Medicaid and Medicare Duals contract wins.
- 2026-2028: Timeframe for achieving incremental diluted earnings per share impact related to newly awarded state Medicaid contracts, and recently closed and announced acquisitions.
Keywords
MOH
Molina Healthcare, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
24 April 2025 10:04 AM
Quarterly Report
- The Medical Care Ratio (MCR) increased from 88.5% to 89.2%, indicating higher medical costs than the previous year.
- Net income decreased from $301 million to $298 million, a slight decline in profitability.
Delay expected
18 March 2025 4:06 PM
Contract Announcement
- The document mentions a potential delay in the start date for the contract as a risk factor.
Worse than expected
17 March 2025 4:18 PM
Proxy Statement
- The Company achieved adjusted net income per diluted share of $22.65, representing a 2024 adjusted net income of $1,308 million, falling short of the Company's initial 2024 earnings guidance.
Delay expected
17 March 2025 4:18 PM
Proxy Statement
- The new contract was originally scheduled to commence on July 1, 2025; however, due to ongoing procurement protests, we now anticipate implementation beginning on July 1, 2026.
Better than expected
4 March 2025 8:28 PM
SEC Form 4
- The vesting of performance stock units at 149% of target suggests the company exceeded its performance goals.
Better than expected
4 March 2025 8:27 PM
SEC Form 4 Filing
- The performance stock units vested at 149%, indicating the company exceeded its performance targets.
Better than expected
4 March 2025 8:20 PM
SEC Form 4 Filing
- The performance stock units vested at 149%, indicating the company exceeded its performance targets.
Delay expected
11 February 2025 4:08 PM
Annual Results
- The Georgia Medicaid contract implementation is now anticipated to begin on July 1, 2026, due to ongoing procurement protests, instead of the originally scheduled date of July 1, 2025.
Better than expected
5 February 2025 4:18 PM
Earnings Release
- The company's full year 2024 GAAP net income increased by 9% year-over-year.
- The company's full year 2024 adjusted net income increased by 8% year-over-year.
- The Marketplace MCR for the full year 2024 was 75.4%, better than the company's expectations.
Delay expected
16 December 2024 5:30 PM
Contract Announcement
- The initial notice of intent to award the Michigan contract was cancelled, indicating a potential for delays in the contract award process.
Capital raise
18 November 2024 4:20 PM
Debt Offering Announcement
- Molina Healthcare completed a private offering of $750 million in senior notes.
- The net proceeds of approximately $740 million will be used for general corporate purposes.
Capital raise
13 November 2024 5:11 PM
Debt Offering Announcement
- Molina Healthcare is raising $750 million through a private offering of senior notes.
- The net proceeds are estimated to be approximately $740 million after deducting fees and expenses.
Capital raise
13 November 2024 9:16 AM
Debt Offering Announcement
- Molina Healthcare intends to privately offer $500 million aggregate principal amount of senior notes due 2033.
- The notes will be sold to qualified institutional buyers and certain persons outside the United States.
- The company plans to use the net proceeds for general corporate purposes.
Worse than expected
12 November 2024 4:17 PM
Current Report
- The cancellation of the initial contract award is worse than expected for Molina Healthcare as it introduces uncertainty and requires additional effort to re-bid.
Delay expected
12 November 2024 4:17 PM
Current Report
- The contract commencement has been delayed to January 1, 2026, due to the cancellation and re-issuance of the RFP.
Worse than expected
24 October 2024 10:34 AM
Quarterly Report
- The consolidated MCR was higher than expected due to medical cost pressures in the Medicaid and Medicare segments.
- The Medicaid MCR increased due to higher than expected medical costs in the legacy portfolio and new contracts.
- The Medicare MCR is slightly above the long-term target range due to elevated LTSS and pharmacy costs and higher outpatient utilization.
Better than expected
23 October 2024 4:19 PM
Quarterly Report
- The company's Q3 results exceeded expectations with a 34% increase in GAAP net income per diluted share and a 19% increase in adjusted net income per diluted share year-over-year.
Better than expected
23 September 2024 9:00 AM
Credit Agreement Amendment
- The increase in the credit facility and extension of the maturity date provide better financial flexibility and reduce near-term refinancing risk.
Worse than expected
25 July 2024 11:38 AM
Quarterly Report
- Net income decreased slightly compared to the same period last year.
- The consolidated medical care ratio (MCR) increased to 88.6% in the second quarter of 2024.
Worse than expected
25 April 2024 9:40 AM
Quarterly Report
- Net income decreased by 6% compared to the first quarter of 2023, indicating worse than expected results.
- The consolidated MCR increased from 87.1% to 88.5%, indicating higher medical costs than expected.
Delay expected
11 April 2024 5:09 PM
Contract Award Announcement
- The document mentions a risk of a delay in the start date for the contract.
Delay expected
21 March 2024 4:18 PM
Proxy Statement
- The four-year contract in Mississippi was expected to begin on July 1, 2023, but was extended by an additional year, and is now expected to commence between September 1, 2024 and July 1, 2025.
Better than expected
21 March 2024 4:18 PM
Proxy Statement
- The company achieved adjusted net income in 2023 of $1,213 million, an increase of 16% over 2022 performance.
- The company generated premium revenue of $32.5 billion, an increase of 5% over 2022.
Better than expected
5 March 2024 8:41 PM
SEC Form 4 Filing
- The performance stock units vested at 170% achievement level, indicating that the company exceeded its performance targets for adjusted net income per share over the three-year performance period.
Better than expected
5 March 2024 8:40 PM
SEC Form 4 Filing
- The vesting of performance stock units at 170% suggests the company exceeded its financial targets, indicating better-than-expected performance.
Worse than expected
29 February 2024 4:21 PM
Contract Announcement
- Molina Healthcare's Virginia subsidiary was not selected for the Cardinal Care Managed Care program, which is a negative development.
Better than expected
7 February 2024 4:18 PM
Quarterly Report
- The company's full year 2023 GAAP earnings per diluted share increased by 39% year-over-year, exceeding expectations.
- The company's full year 2023 adjusted earnings per diluted share increased by 17% year-over-year, exceeding expectations.
- The company's 2024 guidance for premium revenue and adjusted earnings per share is higher than previous estimates.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.