Molina's profit forecast lift overshadowed by Obamacare weakness

Molina primarily sells Medicaid plans to low-income Americans and also offers coverage under the Affordable Care Act, commonly known as Obamacare. Molina expects a **$1.50 per share** loss this year from the start of a new Florida Medicaid contract in the fourth quarter and a **$1 per share** loss tied to the planned Medicare Advantage exit in 2027. Revenue for the quarter fell **4.9%** to **$10.87 billion** from **$11.43 billion** a year earlier, but was still ahead of analysts' estimate of **$10.79 billion**, according to data compiled by LSEG. Molina kept its full-year premium revenue forecast unchanged at about **$42 billion**. Its medical cost ratio, or the percentage of premiums spent on medical services for the quarter, was **92.2%**, compared with its estimate of **92.37%**. However, shares of the Long Beach, California-based company fell over **9%** in extended trading as investors focused on the modest size of the forecast increase and ongoing pressures in some businesses. The insurer said its Marketplace business came under pressure during the quarter because a larger share of enrollees required costly medical care than it had anticipated. Barclays analyst Andrew Mok said Molina's earnings beat and higher guidance were likely overshadowed by weakness in its Obamacare Marketplace business. However, Mok said the issues appeared specific to Molina and should not be viewed as a negative signal for rivals Centene and Oscar Health. Bernstein's Lance Wilkes said the results support the view that Medicaid is stabilizing in 2026, though the limited increase in Molina's guidance suggests a gradual recovery rather than a sharp improvement in margins. Wilkes added that investors will likely focus on membership growth and the company's ability to control administrative costs. Molina Healthcare raised its annual profit forecast on Wednesday after posting second-quarter profit and revenue that beat Wall Street estimates, helped by stronger-than-expected performance in its Medicaid and Medicare businesses. The health insurer now expects annual adjusted earnings to be at least **$5.25 per share**, up from at least **$5.00** previously. For the reported quarter, Molina earned an adjusted profit of **$1.51 per share**, beating analysts' estimate of **$1.39**.

Molina's profit forecast lift overshadowed by Obamacare weakness

Outlook and quarterly metrics

Marketplace weakness and investor reaction

Profit forecast raised after quarterly beat

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