10:52 AM EDT, 07/07/2025 (MT Newswires) -- Molina Healthcare ( MOH ) cut its full-year earnings outlook on Monday amid medical cost pressures across the health insurer's three main business segments.

The company now expects adjusted earnings to come in between $21.50 and $22.50 per share for 2025, down from its previous projections of at least $24.50. The current consensus on FactSet is for $24.48. The lowered guidance reflects a pretax margin of just under 4%, at the low end of its long-term forecast range, the insurer said.

For the second quarter, the company anticipates reporting adjusted EPS of roughly $5.50, "modestly" below its previous expectations. The Street is looking for non-GAAP EPS of $6.20. The preliminary result reflects medical cost pressures in all three lines of the company's business. The company expects these pressures to continue into the second half of the year.

The insurer is scheduled to release its full second-quarter results later this month.

During a first-quarter earnings call in April, Molina Healthcare ( MOH ) Chief Financial Officer Mark Keim told analysts that the company was seeing rate increases within Medicaid "slightly higher" than previously expected, according to a FactSet transcript.

"The short-term earnings pressure we are experiencing results from what we believe to be a temporary dislocation between premium rates and medical cost trend which has recently accelerated," Molina Healthcare ( MOH ) Chief Executive Joseph Zubretsky said in the Monday statement.

Molina Healthcare ( MOH ) said it announced preliminary results due to recent market dynamics and disclosures outside the usual earnings cycle from other companies in the managed healthcare industry. Last week, Centene (CNC) withdrew its full-year earnings outlook, citing lower-than-expected revenue from most states where it provides health insurance marketplace plans.

In May, health insurance giant UnitedHealth Group (UNH) suspended its full-year guidance due to higher-than-expected medical costs.

"As we are still performing near our long-term target ranges, nothing, including the potential impacts of the budget bill, has changed our outlook for the long-term performance of the business," according to Zubretsky.

US President Donald Trump on Friday signed his budget and tax bill into law after gaining approval from the Senate and House of Representatives. Up to 12 million Americans are expected to become uninsured by 2034 due to the broader impact of the bill, Truist Securities said in a Sunday client note, citing estimates by the Congressional Budget Office.

"This could potentially translate to a surge in uncompensated care for providers and simultaneously pressure state Medicaid now facing (about $1 trillion) in federal cuts to impose more restrictive drug formularies," Truist wrote in the note.

The White House said in a statement last month that Trump's budget bill prevents illegal citizens from receiving free health care on taxpayer money and "protects Medicaid for the truly vulnerable."

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