Molina Healthcare beat Wall Street estimates for second-quarter earnings on Wednesday, driven by higher premiums from its government-backed Medicaid insurance plans for low-income individuals.
Shares of the health insurance provider rose 9% in after-market trading.
The company reported total revenue of $9.88 billion, beating analysts' estimates of $9.77 billion. Premiums revenue grew 17% year-over-year to $9.45 billion, bolstered by new contract wins.
The Long Beach, California-based health insurer's primary business is Medicaid insurance, a joint federal and state government-run insurance program for low-income people.
As of March 31, the company served about 5.7 million people through its Medicaid plans, marking a 9% increase from the previous year.
The health insurer posted second-quarter adjusted profit of $5.86 per share, above estimates of $5.5 per share.
Molina's quarterly medical cost ratio, the percentage of premiums paid out for medical services, was 88.6%, higher than LSEG estimates of 88.3%.
The company also offers Medicare plans, which cater to individuals aged 65 and older or those with certain disabilities.
In the three months ended June 30, Molina's Medicaid membership rose to 4.9 million, while Medicare membership increased to 251,000.
The company also reaffirmed its full-year adjusted earnings outlook of at least $23.5 per diluted share just above expectations of $23.34 per share.
