Molina Healthcare, Inc.
) lowered its earnings expectation to $1.45 per share for 2013
from $1.55 per share guided during the fourth-quarter 2012
earnings release. The expectation was lowered to incorporate the
impact from the $550 million cash convertible senior notes
issuance and the anticipated increases to its premium revenue.
Molina projects operating income to be higher by $10 million or
13 cents per share, largely driven by higher premium revenue.
Premium revenue is projected to be $6.7 billion. However, the new
issuance will lower the full-year earnings by 23 cents per share
(includes 21 cent of non-cash interest expense). Nonetheless, the
combined positive impact of 5 cents from higher investment income
and share repurchases will somewhat mute the negative impact from
Molina initially intended to issue $375 million cash convertible
senior notes but finally made an issue of $550 million. This
increase led to an additional interest expense of about 10 cents
Earnings before interest, tax, deprecation and amortization
(EBITDA) is now guided to be $255 million, up from $245 million.
It is likely that the lower guidance for 2013 prompted the share
price to decline 2.1% to close at $32.75 on Wednesday.
Total revenue for 2013 remains unchanged at $7 billion. In
addition, medical care costs and medical care ratio remain
unchanged at $5.9 billion and 88%, respectively.
Earlier this month, Molina reported fourth-quarter 2012 net
earnings per share of 54 cents, significantly surpassing the
Zacks Consensus Estimate of 21 cents and 51 cents earned in the
Among other health maintenance organizations,
) expects operating earnings per share of a minimum of $5.40 in
Health Net Inc
) projects net income guidance of $2.00-$2.10 per share for the
Humana Inc. (
) projected its earnings per share to be $7.60-$7.80 for 2013.
Molina carries a Zacks Rank #2 (Buy).
AETNA INC-NEW (AET): Free Stock Analysis
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MOLINA HLTHCR (MOH): Free Stock Analysis
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