Molina Q2 2020 Earnings Report
Key Takeaways
Molina Healthcare reported a strong second quarter with increased net income and premium revenue. The company's performance was positively impacted by reduced demand for medical services due to the COVID-19 pandemic, which was partially offset by COVID-related premium rate refunds and direct medical costs. The company introduced full year 2021 premium revenue guidance of approximately $21.5 billion, representing 20% growth over 2020.
Premium revenue increased by 8.0% to $4.4 billion compared to the second quarter of 2019.
Medical care ratio (MCR) improved to 82.3% compared to 85.6% in the second quarter of 2019.
Net income rose to $276 million, compared to $196 million for the second quarter of 2019.
The company estimates that COVID-19 increased second quarter after-tax income by approximately $65 million to $100 million.
Molina
Molina
Forward Guidance
The Company has increased its full year 2020 total revenue outlook to approximately $18.8 billion, from its previous estimate of $18.3 billion. The Company introduced full year 2021 premium revenue guidance of approximately $21.5 billion, or 20% growth over 2020.
Positive Outlook
- Full year earnings guidance range remains at $11.20 to $11.70 per diluted share.
- Full year 2020 total revenue outlook increased to approximately $18.8 billion.
- Full year 2021 premium revenue guidance of approximately $21.5 billion, or 20% growth over 2020.
- Kentucky Medicaid managed care RFP was awarded to Molina.
- Acquisition of YourCare assets was completed.
Challenges Ahead
- Environmental uncertainty is expected to exist through the end of the year.
- COVID-related premium rate refunds.
- Impact of lower pricing in the Marketplace program.
- Direct COVID-19 medical costs.
- Unspecified risks and uncertainties that could affect future developments.