Full Press Release Details
Healthcare Reports First Quarter 2017 Results
LONG BEACH, Calif.--(BUSINESS WIRE)--May 2, 2017--Molina Healthcare,
Net income per diluted share for the quarter of $1.37.
Adjusted net income per diluted share for the quarter of $1.47.
Results include the benefit of a $75 million ($0.84 per diluted share)
acquisition termination fee received in the first quarter.
Full year 2017 earnings per diluted share and adjusted earnings per
diluted share guidance revised to reflect acquisition termination fee;
full year 2017 guidance is otherwise confirmed.
Molina Healthcare, Inc. (NYSE: MOH) today reported its financial results
for the first quarter of 2017.
"While we are pleased with the results we reported today, we understand
that they represent only one step along the path to improving on our
2016 results," said Joseph White, interim chief executive officer and
chief financial officer of Molina Healthcare, Inc. "Our entire Company
is focused on improving our profitability in 2017 and beyond."
First Quarter 2017 Compared with First Quarter 2016
Net income per diluted share increased to $1.37 in the first quarter of
2017 compared with $0.43 reported for the first quarter of 2016.
Adjusted net income per diluted share increased to $1.47 in the first
quarter of 2017, compared with $0.51 in the first quarter of 2016.
Income before income taxes increased $67 million to $131 million in the
first quarter of 2017 from $64 million in the first quarter of 2016.
First quarter financial performance was affected by the following
As previously reported, we received a payment of $75 million ($0.84
per diluted share) relating to the termination of a proposed Medicare
acquisition, which was recorded as other income in the first quarter
The performance of our Marketplace program was consistent with
management's expectations. Income before income taxes increased by $8
million ($0.09 per diluted share) as a result of a reduction to the
premium deficiency reserve established for the Marketplace program at
December 31, 2016. The reserve, which was $30 million at December 31,
2016, decreased to $22 million as of March 31, 2017.
The performance of our combined Medicaid and Medicare programs was
consistent with management's expectations, with the exception of the
unfavorable prior-period development of medical claims liabilities in
Illinois discussed below.
Medical costs at the Illinois health plan related to dates of service
in 2016 and earlier reduced income before income taxes by
approximately $20 million ($0.22 per diluted share) in the first
quarter. Excluding this out-of-period impact in Illinois, the medical
care ratio for our combined Medicaid and Medicare programs was
consistent with the expectations reflected in our previously announced
full year 2017 Outlook.
General and administrative expenses as a percentage of total revenue
(the "G&A ratio") were 8.9% in the first quarter, consistent with the
G&A ratio anticipated in our previously announced full year 2017
Outlook. As expected, our G&A ratio increased over 2016 primarily due
to: 1) increased investment in systems and infrastructure; 2) employee
bonuses recorded in 2017 but not in 2016; 3) costs associated with
increased Marketplace enrollment in 2017; and 4) the reduction to
revenue as a result of the 2017 Health Insurer Fee (HIF) moratorium.
The effective tax rate in the first quarter of 2017, while consistent
with our previously announced full year 2017 Outlook, dropped
substantially from prior year levels due primarily to the 2017 HIF
The Company is confirming its 2017 Outlook for earnings per diluted
share and adjusted earnings per diluted share, to $2.53 and $2.90,
respectively, and revising the 2017 Outlook for the impact of the $75
million acquisition termination fee received in the first quarter of
Management will host a conference call and webcast to discuss Molina
Healthcare's first quarter results at 5:00 p.m. Eastern time on Tuesday,
May 2, 2017. The number to call for the interactive teleconference is
(212) 231-2909. A telephonic replay of the conference call will be
available from 7:00 p.m. Eastern time on Tuesday, May 2, 2017, through
6:00 p.m. Eastern Time on Wednesday, May 3, 2017, by dialing (800)
633-8284 and entering confirmation number 21849898. A live audio
broadcast of Molina Healthcare's conference call will be available on
our website, molinahealthcare.com. A 30-day online replay will be
available approximately an hour following the conclusion of the live
About Molina Healthcare
Molina Healthcare, Inc., a FORTUNE 500 company, provides managed health
care services under the Medicaid and Medicare programs and through the
state insurance marketplaces. Through our locally operated health plans
in 12 states across the nation and in the Commonwealth of Puerto Rico,
Molina currently serves approximately 4.8 million members. Dr. C. David
Molina founded our company in 1980 as a provider organization serving
low-income families in Southern California. Today, we continue his
mission of providing high quality and cost-effective health care to
those who need it most. For more information about Molina Healthcare,
please visit our website at molinahealthcare.com.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995: This earnings release contains "forward-looking
statements" regarding our plans, expectations, and anticipated future
events. Actual results could differ materially due to numerous known and
unknown risks and uncertainties. Those known risks and uncertainties
include, but are not limited to, the following:
the success of our profit improvement and cost-cutting initiatives;
the numerous political and market-based uncertainties associated
with the Affordable Care Act (the "ACA") or "Obamacare," including any
potential repeal and replacement of the law, amendment of the law, or
move to state block grants for Medicaid;
the market dynamics surrounding the ACA Marketplaces, including but
not limited to uncertainties associated with risk transfer
requirements, the potential for disproportionate enrollment of higher
acuity members, the withdrawal of cost sharing subsidies and/or
premium tax credits, the adequacy of agreed rates, and potential
disruption associated with market withdrawal;
subsequent adjustments to reported premium revenue based upon
subsequent developments or new information, including changes to
estimated amounts payable or receivable related to Marketplace risk