Insurance giant Molina Health Care Inc. is on a financial rebound, reporting more than $200 million in second quarter earnings after suffering a loss during the same period last year.
The Long Beach-based company reported Aug. 1 $202 million in earnings ($3.02 a share) in the three months ended June 30, compared to a $230 million loss (-$4.10 a share) during the same period in 2017. Revenue, however, fell to $4.9 billion for the trailing three months from $5 billion a year ago.
The boost in earnings follows first-quarter net income of $107 million during a major restructuring of the firm.
“Our second quarter results are a strong indication that the early stages of our margin recovery and sustainability plan are working,” said Joe Zubretsky, chief executive of Molina, in a statement. “Our focus on managed care fundamentals and a more rigorous performance management process is reflected in our improved earnings.”
Shares in Molina Health Care rose 17 percent to nearly $122 by market close. Its stock price was 104 percent higher than the same period last year.
Molina Health Care provides managed health care services under the Medicaid and Medicare programs and through the state insurance markets, serving approximately 4.1 million members.
The Fortune 500 firm has been in the midst of a wholesale makeover, after a new chief executive late last year to turn around an insurance company beset by lower enrollments, higher costs, and 1,400 employee layoffs.
On Feb. 12, it reported a net loss of $512 million in 2017, compared with $52 million in net earnings the year before.
In late June, it announced June 27 it would sell its Medicaid management information systems business for around $220 million. The divestiture of Molina Medicaid Solutions to DXC Technology Co. is expected to close in the third quarter.
Analyst Jeffrey Loo of CFRA Research in New York placed a “hold” rating on Molina, and raised the company’s 12-month target to $136 a share based on performance.
“We are encouraged by the renewal of several Medicaid contracts during the quarter,” he writes, “including Washington, Florida and Puerto Rico.”
This story and its headline have been corrected.
Health business reporter Dana Bartholomew can be reached at firstname.lastname@example.org. Follow him on Twitter @_DanaBart.