Molina Healthcare Stung By Membership Decline, Stocks Sinks 12%

Molina Healthcare Inc. (NYSE:MOH) shares fell Thursday after the health insurer reported lower second-quarter premium revenue despite topping Wall Street estimates for earnings and revenue.

Earnings Beat As Premium Revenue Declines

Adjusted earnings were $1.51 per share, down 72.4% from $5.48 a year earlier but above the analyst consensus estimate of $1.39. Revenue fell 4.8% year over year to $10.87 billion, topping expectations of $10.79 billion, according to Benzinga Pro.

Premium revenue declined 6% year over year to approximately $10.2 billion, reflecting lower membership that was partially offset by rate updates.

Net income fell sharply to $60 million, or $1.19 per share, from $255 million, or $4.75 per share, a year earlier, as lower premium revenue and a higher medical care ratio weighed on profitability.

Membership Falls Across Key Segments

Total membership declined to 4.926 million in the second quarter from 5.49 million at the end of 2025 and 5.746 million a year earlier. Medicaid membership fell to 4.418 million from 4.774 million a year earlier.

The consolidated medical care ratio (MCR) increased to 92.2% from 90.4% a year earlier, an increase of 180 basis points.

Medicaid MCR was 92.7%, in line with the company’s expectations, supported by rate updates and stable medical cost trends.

Medicare MCR was 90.7%, better than expected, reflecting lower medical costs and pricing changes implemented for 2026.

Marketplace MCR rose to 88.9%, exceeding the company’s expectations due to prior-year risk adjustment and program integrity initiatives, as well as an unfavorable member acuity mix in the current year.

Guidance Raised

Molina reaffirmed its fiscal 2026 premium revenue guidance of approximately $42 billion.

The company raised its full-year GAAP earnings outlook to at least $2.15 per share from at least $1.90 previously. That remains below the Wall Street consensus estimate of $2.60.

Adjusted earnings guidance increased to at least $5.25 per share from at least $5.00 previously, ahead of the analyst consensus estimate of $5.15.

The higher earnings outlook reflects stronger first-half Medicaid performance. Molina said a $1.50 per-share improvement in Medicare, driven by developing medical cost trends, is expected to be offset by a $1.50 per-share reduction related to its Marketplace business.

Excluding the Marketplace revision, the company said full-year adjusted earnings guidance would have been $6.75 per share.

The outlook also includes a projected $1.50 per-share loss from the implementation of a new Florida Medicaid contract in the fourth quarter and a $1.00 per-share loss tied to the company’s traditional Medicare Advantage Prescription Drug plan, which it previously announced it will exit in 2027.

Following Molina’s update, shares of Centene Corp. (NYSE:CNC) also traded lower. In June, Centene said it would offer voluntary buyouts to most employees as it seeks to reduce costs after a significant decline in health plan membership.

MOH Price Action: Molina Healthcare shares were down 12.69% at $193.60 at the time of publication on Thursday, according to Benzinga Pro data.

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