Molina Healthcare's fourth quarter earnings surpassed the Zacks
Consensus Estimate on increased memberships, higher revenues and
enhanced administrative cost efficiencies. Financial position at
2014-end also remained strong with higher cash flows and increased
assets. The company's ability to engage in inorganic growth
initiatives and capital deployment also reflect an improved
financial position. However, higher medical care costs are a
dampener. Additionally, the adverse effects of enrollment delays
and program execution as well as low interest rates raise caution
for the future. Nevertheless, the ACA implementation is boosting
membership, and premium revenues. We maintain our Neutral
recommendation on the stock.
Founded in 1980 and headquartered in Long Beach, CA, Molina
Healthcare Inc. is a multi-state managed care organization
participating exclusively in government-sponsored healthcare
programs such as the Medicaid program and the State Children's
Health Insurance Program ("SCHIP"), catering to low-income
The health plans are locally operated by wholly owned
subsidiaries of Molina, each of which is licensed as a health
maintenance organization, or HMO. Molina Healthcare derives
revenues primarily from premiums paid to its health plans by the
relevant state Medicaid authority. The premium revenues are jointly
financed by the federal government and the states. The company also
derives revenues from the federal Centers for Medicare and Medicaid
Services ("CMS") in connection with its Medicare services.
Molina Healthcare was formerly known as American Family Care
Inc. until it changed its name in Mar 2000. Effective Dec 31, 2009,
Molina Healthcare terminated operations at the small Medicare
health plan in Nevada.
Molina Healthcare acquired the Health Information Management
("HIM") business of Unisys Corporation on May 1, 2010 for $131.3
million. The acquired division now operates as Molina Healthcare
Medicaid Solutions, a subsidiary of Molina Healthcare. Molina
Healthcare Medicaid Solutions offers design, development,
implementation and business process outsourcing services to state
governments in Idaho, Louisiana, Maine, New Jersey and West
Virginia. The subsidiary also provides drug rebate administration
services in Florida.
Molina Healthcare completed its acquisition of Abri Health Plan
on Sep 1, 2010, for approximately $16.0 million. Additionally, on
Dec 7, 2011, the company purchased Molina Healthcare Center, an
office building in California, for $81 million. In 2013 the company
acquired Lovelace Community Health Plan's contract for the New
Mexico Medicaid Salud! Program, for $53 million.
As of Sep 30, 2014, Molina Healthcare serves approximately 2.4
million members in 11 states.
Molina Healthcare Inc. (MOH): Read the Full
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