Molina Healthcare Q4 Earnings Miss Estimates on Growing Medical Costs

Core Insights - Molina Healthcare, Inc. reported fourth-quarter 2024 adjusted EPS of $5.05, missing the Zacks Consensus Estimate of $5.81, but reflecting a 15.3% year-over-year growth [1] - Total revenues for the quarter reached $10.5 billion, a 16% increase year-over-year, although it slightly missed the consensus mark [1][2] Financial Performance - Full-year 2024 total revenues were $40.65 billion, up from $34.07 billion the previous year, surpassing the estimate of $40.58 billion [3] - Adjusted EPS for 2024 grew to $22.65 from $20.88, but fell short of the consensus estimate of $23.44 [3] - Adjusted net income for 2024 was $1.31 billion, an increase from $1.21 billion year-over-year [3] Operational Highlights - Premium revenues in Q4 2024 were $9.98 billion, a 19.4% increase year-over-year, exceeding the Zacks Consensus Estimate of $9.85 billion [4] - Total membership as of December 31, 2024, rose 10.8% year-over-year to approximately 5.5 million, although it missed the consensus estimate by 3.1% [5] - Investment income decreased by 2.6% year-over-year to $111 million, but was above the consensus mark of $108.2 million [5] Expense and Ratios - Total operating expenses for Q4 2024 were $10.1 billion, a 15.9% increase year-over-year, exceeding model estimates due to rising medical care costs and higher administrative expenses [6] - The consolidated medical care ratio (MCR) was 90.2% for the quarter, up from 89.1% a year ago, and higher than the consensus mark of 88.72% [7] Balance Sheet and Cash Flow - As of December 31, 2024, cash and cash equivalents were $4.66 billion, down from $4.85 billion at the end of 2023 [8] - Total assets increased to $15.63 billion from $14.89 billion at the end of 2023, while long-term debt rose to $2.92 billion from $2.18 billion [8] - Net cash provided by operating activities was $644 million in 2024, a significant decline from $1.66 billion in 2023 [9] 2025 Guidance - Management projects premium revenues to reach around $42 billion in 2025, indicating a 9% improvement from 2024 [11] - Adjusted EPS is expected to be at least $24.50, reflecting an 8% increase from 2024 [11] - Total membership is estimated to grow to 5.9 million by the end of 2025, with a projected consolidated MCR of 88.7% [12]