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LONG BEACH, Calif. – Molina Healthcare (NYSE: NYSE:) reported strong second-quarter 2024 results, with adjusted earnings per diluted share of $5.86, beating analysts’ consensus estimate of $5.65. The company’s revenue also beat expectations, coming in at $9.88 billion versus the consensus estimate of $9.76 billion. Molina Healthcare shares jumped 9% following the announcement, indicating a strong positive market response to the earnings and revenue beat.
The healthcare provider saw premium revenue increase 17% year-over-year to nearly $9.4 billion for the second quarter. This growth was driven by new contract wins, acquisitions and expansions within its existing markets, although it was partially offset by the impact of the Medicaid redesignation. However, GAAP net income per diluted share decreased 3% year-over-year to $5.17. However, adjusted net income per diluted share increased 4% year-over-year, reflecting the company’s strong operating performance and effective management of Medicare costs.
Molina Healthcare’s Medicare consolidated ratio was 88.6%, with the company focused on managing medical costs. Medicaid consolidated ratio was reported at 90.8%, impacted by a one-time retroactive premium adjustment and new plan expansions. Excluding these factors, Medicaid consolidated ratio was approximately 89.3%. Medicare consolidated ratio of 84.9% and Medicare market consolidated ratio of 71.6% performed better than expected, driven by favorable risk-adjusted results and benefit adjustments.
CEO Joseph Zubritsky expressed satisfaction with the quarter’s performance, highlighting strong contributions from our Medicaid, Medicare and Marketplace businesses. “We have successfully navigated an unprecedented repositioning process, and these very attractive businesses provide the foundation for sustained, profitable growth in the near and long term,” Zubritsky said.
Looking ahead, Molina Healthcare reaffirmed its guidance for fiscal 2024, projecting premium revenue of approximately $38 billion and adjusted earnings per share of at least $23.50. This guidance implies 13% growth over fiscal 2023, despite Medicaid pressures in the second quarter.
The company expects Medicaid challenges to be offset by higher net investment income and contract extensions in Virginia and Florida in the latter half of the year. However, the company’s full-year revenue guidance is below analysts’ consensus of $39.7 billion, while its earnings per share guidance is slightly above analysts’ consensus of $23.34.
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