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LONG BEACH - Molina Healthcare, Inc. (NYSE:MOH) saw its shares drop 4.3% after reporting second-quarter 2025 adjusted earnings that fell short of analyst expectations, as rising medical costs weighed on profitability and forced the company to cut its full-year guidance.
The managed healthcare provider reported adjusted earnings of $5.48 per share, missing analyst estimates of $5.82, despite revenue climbing 15% YoY to $11.43 billion, which exceeded the consensus estimate of $10.94 billion. The company’s medical care ratio (MCR) - a key measure of medical costs as a percentage of premium revenue - deteriorated to 90.4% from 88.6% in the same quarter last year.
"The current earnings pressure we are experiencing results from what we believe to be a temporary dislocation between premium rates and medical cost trend which has recently accelerated," said Joseph Zubretsky, President and Chief Executive Officer. "We are still performing near our long-term target ranges, and nothing has changed our outlook for the long-term performance of the business."
Molina significantly reduced its full-year 2025 adjusted earnings guidance to no less than $19.00 per share, well below the analyst consensus of $22.53. The company maintained its premium revenue forecast of approximately $42 billion.
The earnings pressure was particularly evident in the company’s Medicare segment, where the MCR jumped to 90.0% from 84.9% a year earlier, reflecting higher utilization among high-acuity members. The Marketplace segment’s MCR also increased substantially to 85.4% from 71.6% in the prior-year period.
As of June 30, 2025, Molina served approximately 5.7 million members, representing an increase of 167,000 members compared to the same period last year. The company’s membership growth was driven by new contract wins, acquisitions, and growth in its current footprint, partially offset by the impact of Medicaid redetermination in 2024.
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