Why Is Molina (MOH) Up 6.1% Since Last Earnings Report?

Core Viewpoint - Molina Healthcare has shown strong performance in its second-quarter earnings, driven by membership growth and increased revenues, despite rising medical care costs and operational challenges [2][3][5]. Financial Performance - Adjusted EPS for Q2 2024 was $5.86, exceeding the Zacks Consensus Estimate by 2.3% and reflecting a 3.7% increase year-over-year [2]. - Total revenues reached $9.9 billion, marking an 18.7% year-over-year growth and surpassing the consensus estimate by 0.9% [2]. - Premium revenues amounted to $9.4 billion, up 17.5% year-over-year, exceeding both the Zacks Consensus Estimate and internal estimates [5]. Membership and Growth - Total membership increased by 8% year-over-year to approximately 5.6 million, meeting consensus estimates [6]. - Membership growth was observed across Medicaid, Medicare, and Marketplace segments [6]. Acquisition Activity - Molina Healthcare has agreed to acquire ConnectiCare for $350 million, representing 25% of the estimated premium revenues for 2024 [4]. - The acquisition is expected to close in the first half of next year and will be funded with cash on hand [4]. Operational Metrics - Total operating expenses rose by 19.8% year-over-year to $9.4 billion, driven by increased medical care costs and administrative expenses [7]. - The consolidated medical care ratio (MCR) was 88.6%, up from 87.5% a year ago, indicating higher medical costs relative to premium revenues [8]. Financial Position - As of June 30, 2024, Molina had cash and cash equivalents of $4.4 billion, down from $4.8 billion at the end of 2023 [9]. - Total assets increased to $15.2 billion, while total stockholders' equity rose to $4.8 billion from $4.2 billion at the end of 2023 [10]. Future Guidance - Management expects premium revenues to reach around $38 billion in 2024, indicating a 17% increase from 2023 [11]. - Adjusted EPS is projected to be at least $23.50 for 2024, reflecting a 13% rise from the previous year [11]. - Total membership is anticipated to grow to 5.7 million by the end of 2024, representing a 14.7% increase from 2023 [12].