UnitedHealth Posts Improved Revenue, With Broad Growth -- WSJ

By Kimberly Chin and Anna Mathews 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 16, 2019).

UnitedHealth Group Inc. said its sales rose in the fourth quarter as the company continued to post diversified growth from health-care-plan membership, premiums and a network of health services.

Revenue increased 12% from a year earlier to $58.42 billion. Analysts polled by Refinitiv were expecting sales of $58.01 billion. Revenue at the UnitedHealthcare segment rose 11% to $46.2 billion, while sales at the Optum segment increased 13% to 27.6 billion.

The parent of the nation's largest health insurer said net earnings fell 16% to $3.04 billion, or $3.10 a share. Analysts had expected the company to earn $3.05 a share.

On an adjusted basis, UnitedHealth reported profit of $3.28 a share, compared with analysts' estimates of $3.21 a share.

However, during UnitedHealth's earnings call, analysts focused on the insurance unit's medical-loss ratio, which reflects the share of premiums that goes toward medical costs. The ratio was slightly worse than some analysts had projected.

UnitedHealth Chief Executive David Wichmann said the result was almost exclusively tied to Medicaid performance, particularly the Temporary Assistance for Needy Families program in five states. He said the results were affected by rates and cost issues, and UnitedHealth is moving to fix both. Results on the Medicaid plans improved in the second half of 2018 and "we expect 2019 to show considerable additional improvement as we move that business back to its target margin range," Mr. Wichmann said.

UnitedHealth affirmed its guidance for the full year. It expects to report earnings of $13.70 to $14 a share, and adjusted earnings of $14.40 to $14.70 a share. It also expects cash flows from operations to be between $17.3 billion and $17.8 billion.

Shares in UnitedHealth, which have gained 8.5% in the past 12 months, were up 2.3% at $253.81 on Tuesday afternoon.

Write to Kimberly Chin at [e-mail] and Anna Mathews at [e-mail]

(END) Dow Jones Newswires

January 16, 2019 02:47 ET (07:47 GMT)

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