UnitedHealth Sales Rise Across Segments --update

By Kimberly Chin and Anna Mathews 

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

Revenue rose 12.2% to $58.42 billion from a year ago. Analysts polled by Refinitiv were expecting sales of $58.01 billion. Revenue from its UnitedHealthcare segment rose by 11% to $46.2 billion while sales from its Optum segment grew by 13% to 27.6 billion.

The parent of the nation's largest health insurer said net earnings in the period ended Dec. 31 fell 16% to $3.04 billion, or $3.10 a share, from a year earlier. Analysts 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, focused on the Temporary Assistance for Needy Families program in five states. He said the results were affected by both 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," the CEO said.

UnitedHealth affirmed its guidance for the full year. It expects to report earnings of $13.70 to $14 a share 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 of UnitedHealth, which have gained 8.5% in the past 12 months, were up about 3% at midday to around $255.66.

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

(END) Dow Jones Newswires

January 15, 2019 11:54 ET (16:54 GMT)

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