April 22 (Reuters) – Health insurer Molina Healthcare on Wednesday beat Wall Street estimates for first-quarter adjusted profit, helped by favorable medical costs, sending its shares up over 2% in after-hours trading.
The company benefited from higher enrolment in government‑backed health plans, which boosted premium revenue and offset increased patient demand for surgical procedures.
Larger insurance peers UnitedHealth and Elevance also reported strong results, benefiting from higher premiums and keeping medical costs in check.
Molina also reaffirmed its 2026 outlook for total premium revenue of about $42 billion and annual adjusted earnings of at least $5 per share.
In the previous quarter, Molina said it would exit Medicare Advantage prescription drug plans in 2027 due to the underperformance of the business.
The company primarily sells Medicaid plans to low-income Americans and also offers coverage under the Affordable Care Act, commonly known as Obamacare.
Revenue for the quarter came in at $10.8 billion, compared to analysts’ average estimate of $10.87 billion, according to data compiled by LSEG.
For the quarter ended March 31, Molina reported an adjusted profit of $2.35 per share, beating analysts’ estimate of $1.92 per share.
Its medical cost ratio or the percentage of premiums spent on medical services for the quarter was 91.1%, compared with its estimate of 90.73%.
(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Vijay Kishore)
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