Molina Healthcare third-quarter profit falls to $38 million and reaffirms guidance

Molina Healthcare, Inc. (MOH) said Wednesday that third-quarter 2026 net income was $38 million, or $0.73 per diluted share, down from $79 million, or $1.51 per diluted share, a year earlier.

Adjusted earnings were $0.89 per diluted share, and the company reaffirmed its full-year 2026 guidance, the company said in a press release.

The managed healthcare company provides services under the Medicaid and Medicare programs and through state insurance marketplaces.

Here's how the company did:

• GAAP net income: $38 million, or $0.73 per diluted share, vs. $79 million, or $1.51 per diluted share, a year earlier
• Adjusted net income: $46 million, or $0.89 per diluted share, vs. $97 million, or $1.84 per diluted share, a year earlier
• Premium revenue: $10,457 million vs. $10,841 million a year earlier
• Total revenue: $11,082 million vs. $11,477 million a year earlier

Premium revenue fell 4% from a year earlier. The company attributed the decline to lower membership in Medicaid and Marketplace, partly offset by rate updates.

GAAP net income fell 52%, and adjusted net income fell 53%. The company said the decrease is attributed mainly to a higher consolidated medical care ratio, or MCR, which measures medical costs as a percentage of premium revenue.

The consolidated MCR was 92.9%, up from 92.6% a year earlier.

Here's how the company's segments did during the quarter:

• Medicaid: premium revenue of $8,199 million vs. $8,015 million a year earlier, with an MCR of 93.0% vs. 92.0%
• Medicare: premium revenue of $1,616 million vs. $1,610 million, with an MCR of 93.0% vs. 93.6%
• Marketplace: premium revenue of $642 million vs. $1,197 million, with an MCR of 92.5% vs. 95.6%

The company served approximately 4.9 million members as of Sept. 30.

For the first nine months of 2026, GAAP net income was $112 million, or $2.19 per diluted share, compared with $632 million, or $11.79 per diluted share, a year earlier.

Adjusted net income for the nine months was $243 million, or $4.74 per diluted share, against $724 million, or $13.49 per diluted share, a year earlier.

Nine-month results include a $93 million impairment charge, or $1.82 per diluted share, from the company's decision to exit the Medicare Advantage Prescription Drug product for 2027.

The company said the product does not align with its strategic shift to focus exclusively on dual eligible members in Medicare.

Cash and investments at the parent company were approximately $608 million as of Sept. 30, compared with $223 million at Dec. 31, 2025.

Operating cash flow for the nine months was $629 million, compared with an outflow of $237 million a year earlier. The company said the increase was driven mainly by lower government receivable and payable settlements in 2026.

Days in claims payable were 44 at Sept. 30, consistent with June 30, 2026.

The company reaffirmed its full-year 2026 guidance, and metrics across all segments were also reaffirmed.

Premium revenue guidance is unchanged at approximately $42 billion. The company expects full-year 2026 GAAP earnings of at least $2.38 per diluted share, and it reaffirmed adjusted earnings of at least $5.25 per diluted share.

Guidance includes a loss of $1.50 per share from implementing the new Florida Medicaid contract in the fourth quarter of 2026.

It also includes a loss of $1.00 per share from the traditional MAPD product, which the company previously announced it will exit for 2027.

"We are pleased with our third quarter results in this challenging environment and reaffirm our full year guidance," said President and Chief Executive Officer Joseph Zubretsky. "With the apparent plateauing of medical cost trend, which remains at elevated levels, and the strength of recent rate updates for 2027, we believe we are likely observing the beginning of the turn in Medicaid margins."

The G&A ratio was 6.4%, the same as a year earlier, and the adjusted G&A ratio was 6.3%. The company said the figures reflect continued operating discipline.

Adjusted results exclude items such as amortization of acquired intangible assets, acquisition-related expenses and impairments, which the company said are not indicative of longer-term business trends.

In the third quarter, amortization of intangible assets was $10 million, and adjustments net of tax totaled $8 million.

The company will host a conference call and webcast at 8:00 a.m. Eastern Time on Thursday, Oct. 22.