UnitedHealth's Revenue, Profit Tops Forecasts

By Joshua Jamerson 

UnitedHealth Group Inc. reported a 56% increase in profit in the latest quarter on climbing revenue from premiums, as its Optum health-care delivery businesses continued to grow.

The largest U.S. health care insurer and the first to report earnings, UnitedHealth is typically viewed as a bellwether for the industry.

The Minnetonka, Minn., company reported net income of $1.90 billion, or $1.96 a share, compared with $1.22 billion, or $1.26, in the year-ago quarter. Excluding items, UnitedHealth earned $2.11 a share, compared with $1.40 a year ago. Analysts, surveyed by Thomson Reuters, anticipated $2.07 a share.

Revenue rose 9% to $47.52 billion, compared with $47.26 projected by analysts.

At Optum, the company's health-services unit, revenue rose 1.2%. Declines in its OptumRx division partially offset growth from the health-care delivery businesses. The Optum arm recently announced that it will purchase Surgical Care Affiliates Inc. for about $2.3 billion, deepening UnitedHealth's role in providing health care.

Meanwhile, the insurer's medical-cost ratio -- the percentage of premiums paid in claims -- declined 190 basis points year-over-year to 80.8% in the fourth quarter.

UnitedHealth said revenue from its employer-based and individual plans rose 12% to $13.5 billion in the quarter. Growth in employer-sponsored groups offset decreases in individual benefit coverage, which includes its plans' that are a part of the Affordable Care Act. The report comes less than a week after the Senate took the first step toward a repeal of the Affordable Care Act, whose marketplaces UnitedHealth has largely withdrawn from. The company also said Medicare and retirement revenue rose 16% to $14 billion in the fourth quarter.

The company backed its outlook for earnings this year, projecting a range of $9.30 to $9.60 a share.

Shares, which have climbed 48% in the past 12 months, were inactive premarket.

Write to Joshua Jamerson at [e-mail]

(END) Dow Jones Newswires

January 17, 2017 06:46 ET (11:46 GMT)

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