Molina Healthcare Inc.
) reported third-quarter 2012 net earnings per share of 7 cents,
surpassing the Zacks Consensus Estimate of a loss of 13 cents.
However, earnings per share lagged the year-ago earnings of 41
cents. Net income for the quarter came in at $3.4 million
compared with $19 million in the prior-year quarter.
Total revenue for the reported quarter climbed to $1.54
billion from $1.18 billion in the prior-year quarter. Total
revenue also exceeded the Zacks Consensus Estimate of $1.52
Premium revenues surged 31% year over year to $1.5 billion,
primarily due to membership growth, favorable change in
membership mix and impact of benefit expansion. Moreover,
Molina's service revenue jumped to $48.4 million from $37.7
million in the year-ago quarter and investment income increased
to $1.17 million from $0.76 million a year ago. Additionally, the
company recorded a rental income of $1.88 million in the
Total expenses also surged 34% year over year to $1.53
billion. The surge was driven by medical care costs that
escalated to $1.31 billion from $0.96 billion in the prior-year
quarter, cost of service revenue that increased to $37.0 million
from $34.58 million, general and administrative (G&A)
expenses that escalated to $127.5 million from $99.6 million,
depreciation and amortization (D&A) costs that increased to
$16.0 million from $13.4 million and premium tax expenses that
inched up to $37.9 million from $36.4 million in the prior-year
However, interest expense declined to $4.32 million from $4.38
million in the year-ago quarter. Further, medical care ratio
(ratio of medical care costs to premium revenue) went up to 88.3%
from 84.3% in the year-ago quarter.
Operating income was $27.5 million in the reported quarter
compared with $51.4 million in the comparable quarter last
Molina exited the reported quarter with $1.1 billion in cash
and investments, while the parent company had cash and
investments of $41 million. At the end of the quarter, Molina's
total assets increased to $1.91 billion from $1.65 billion at
2011 end, although shareholders' equity inched down to $755.0
million from $755.1 million as of December 31, 2012. During the
reported quarter, cash flow from operations declined to $28.0
million from $40.3 million in the prior-year quarter.
UnitedHealth Group Inc.
) reported its third quarter 2012 earnings of $1.50 per share,
significantly ahead of the Zacks Consensus Estimate of $1.31 per
share. Higher revenue across the board, strong enrollment growth,
partially offset by higher operating costs were responsible for
the better-than-expected results. Also, share repurchases boosted
the bottom-line earnings.
Coventry Health Care Inc.
) will report its third-quarter financial results before the
opening bell on October 26.
Molina currently carries a Zacks #2 Rank, implying a
short-term Buy rating. Considering the fundamentals, we maintain
a long-term 'Neutral' recommendation on the shares.
COVENTRY HLTHCR (CVH): Free Stock Analysis
MOLINA HLTHCR (MOH): Free Stock Analysis
UNITEDHEALTH GP (UNH): Free Stock Analysis
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