Molina Healthcare Inc. reported a GAAP loss of $3.15 per diluted share and an adjusted loss of $2.75 for its fourth quarter of 2025, while total revenue climbed to $11.38 billion, an 8.3% year‑over‑year increase. The medical‑care ratio rose to 94.6%, indicating tighter margins as medical costs outpaced premium income.
Revenue growth was driven primarily by a 12% increase in Medicaid enrollment and a 9% rise in Marketplace premium revenue, offset by a 4% decline in traditional Medicare Advantage Part D revenue. The stronger Medicaid mix helped the company beat the consensus revenue estimate of $10.8 billion, while the loss reflected higher medical‑cost inflation and retroactive revenue adjustments that were not fully offset by cost‑control measures.
The adjusted loss of $2.75 per share represents a sharp swing from the $5.05 adjusted EPS reported in Q4 2024. The miss is largely attributable to a $1.50 per share burden from implementing a new Florida CMS Medicaid contract and an additional $1.00 per share cost from underperformance in the Medicare Advantage Part D product. These one‑time and ongoing cost items, combined with higher utilization rates in Medicaid and Medicare, pushed the medical‑care ratio to 94.6%.
Molina’s 2026 guidance now projects adjusted earnings of at least $5.00 per share, a significant downgrade from the prior consensus estimate of $13.71. The company explained that the guidance is burdened by $2.50 per share, reflecting the new Medicaid contract and Part D underperformance. Management indicated that the 2026 outlook reflects a trough in Medicaid industry margins, but it also highlighted the expected $6 billion annual run‑rate premium from the Florida CMS contract as a key growth driver.
Investors reacted negatively to the guidance downgrade and margin compression, citing the large gap between Molina’s projected $5.00 EPS and the analyst consensus of $13.71. The market’s response underscored concerns about the company’s near‑term profitability and the impact of rising medical costs on its Medicaid and Medicare segments.
CEO Joe Zubretsky said the company believes the 2025 medical‑cost trend was an anomaly and that Medicaid margins will remain positive even at the cycle’s low point. CFO Mark Keim added that embedded earnings exceed $11 per share, underscoring long‑term profitability potential despite the current earnings miss.
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