Molina Healthcare Shares Crater on Weak 2025 Profit Forecast

Molina expects full-year earnings per share of at least $3.20, a sharp decline from the $8.92 reported in 2025. On an adjusted basis, the company targets at least $5 per share—far below the $13.66 analysts polled by FactSet had anticipated. Total revenue for the year is projected at $44.5 billion, also missing consensus estimates of $46.63 billion.

Medicaid and Medicare Headwinds

The company attributed the reduced guidance to a $2.50 per share impact from implementing a new Medicaid contract and struggles within its Medicare Advantage Part D product. Due to ongoing underperformance, Molina announced plans to exit the Part D market by 2027. Chief Executive Joseph Zubretsky noted that while Medicaid margins are hitting a cyclical trough due to rate imbalances, the company remains profitable in that segment on a pretax basis.

The outlook follows a disappointing fourth quarter where Molina swung to a $160 million loss, or $3.15 per share, compared to a $251 million profit a year earlier. Results were weighed down by several factors:

• Retroactive premium adjustments in the California Medicaid market.
• Implementation costs associated with new state contracts.
• Elevated medical cost trends within the Medicare Advantage segment.

Despite the bottom-line miss, quarterly revenue grew to $11.38 billion, beating the $10.88 billion expected by analysts. Premium revenue rose 11% to $43.1 billion, a gain the company attributed to recent acquisitions and organic growth.