Molina Q4 2019 Earnings Report
Key Takeaways
Molina Healthcare reported a net income of $168 million for Q4 2019, compared to $201 million in Q4 2018. Premium revenue decreased by 7.1% to $4.1 billion. The company introduced full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70.
Premium revenue decreased by 7.1% to $4.1 billion compared to Q4 2018.
The medical care ratio (MCR) increased to 86.0% compared to 85.1% in Q4 2018.
The general and administrative (G&A) expense ratio increased to 8.0% compared to 7.2% in Q4 2018.
After-tax margin was 3.9% compared to 4.3% in Q4 2018.
Molina
Molina
Molina Revenue by Segment
Forward Guidance
The Company issued its full year 2020 earnings guidance, including GAAP earnings per diluted share of $11.20 - $11.70 and premium revenue growth of 7.4%.
Positive Outlook
- Medicaid after-tax margins are expected to perform well benefiting from stable rate and cost trend environments.
- Medicare after-tax margins are expected to be strong despite the impact of the Health Insurer Fee.
- Marketplace after-tax margins are expected to be lower reflecting pricing actions taken for the year.
- The reintroduction of the Health Insurer Fee in 2020 with an impact of approximately $0.30 per diluted share.
- Steady state in Texas for the full year 2020.
Challenges Ahead
- The YourCare Health Plan and NextLevel Health Partners acquisitions are not included in guidance as the transactions have not closed.
- Together they have over $500 million in annualized premium revenue.
- MCR 86.2% - 86.4%
- G&A Ratio ~7.2%
- Effective Tax Rate 30.8% - 31.1%
Revenue & Expenses
Visualization of income flow from segment revenue to net income