Molina Healthcare Loses Missouri ContractTuesday, February 21, 2012
Molina Healthcare Inc. shares fell Tuesday after the Medicaid managed care provider said it had lost a key contract in Missouri, and thus was lowering its full-year earnings guidance.
The Long Beach company said in regulatory filing that the Missouri Office of Administration’s purchasing division informed the company on Friday that it had not been awarded a new state contract. The existing contract will expire on June 30.
The company’s licensed health plans in California and nine other states serve about 1.6 million members eligible for Medicaid, Medicare, and other government-sponsored health care programs.
Molina said that revenue from Missouri represented 4.7 percent of the company's totals as of Dec. 31. The company is scheduled to report fourth-quarter results on Thursday. It said it will take a one-time, non-cash impairment charge of about $64.6 million, representing $1.34 a share, related to losing the contract that it has held since 2007.
Molina last month said it expected to be able to report full-year earnings of $1.80 a share, but now expects to achieve only $1.75.
Shares were down $1.27, or 3.5 percent, to $35.07 in midday trading on the New York Stock Exchange.