The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Molina Healthcare met expectations on revenues and crushed expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly and GAAP earnings per share grew.
Gross margins dropped, operating margins shrank, net margins grew.
Molina Healthcare booked revenue of $1.58 billion. The 11 analysts polled by S&P Capital IQ hoped for revenue of $1.57 billion on the same basis. GAAP reported sales were 21% higher than the prior-year quarter's $1.31 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.54. The 14 earnings estimates compiled by S&P Capital IQ averaged $0.22 per share. GAAP EPS were $0.54 for Q4 versus -$0.72 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 19.3%, 120 basis points worse than the prior-year quarter. Operating margin was 3.4%, 40 basis points worse than the prior-year quarter. Net margin was 1.6%, 410 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.61 billion. On the bottom line, the average EPS estimate is $0.29.
Next year's average estimate for revenue is $7.23 billion. The average EPS estimate is $1.43.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 127 members out of 139 rating the stock outperform, and 12 members rating it underperform. Among 37 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 32 give Molina Healthcare a green thumbs-up, and five give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Molina Healthcare is hold, with an average price target of $28.67.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.