UnitedHealth Takes Aim at New 52-Week High After Solid Earnings

UnitedHealth Group Inc. (NYSE: UNH) reported fourth-quarter and full-year 2016 results before markets opened Tuesday morning. The health insurance and benefits management firm reported adjusted diluted quarterly earnings per share (EPS) of $2.11 on revenues of $47.52 billion. In the same period a year ago, UnitedHealth reported EPS of $1.40 on revenues of $43.6 billion. Fourth-quarter results also compare to the consensus estimates for EPS of $2.07 on revenues of $47.26 billion.

For the full year, UnitedHealth reported adjusted EPS of $8.05 on revenues of $184.83 billion, compared with EPS in 2015 of $6.45 and revenues of $157.11. Analysts were looking for EPS of $8.02 and revenues of $183.91 billion.

Total enrollment numbers increased year-over-year from 46.4 million to 48.59 million. Commercial enrollments rose from 29.73 million to 30.58 million. Medicare and Medicaid enrollment rose from 12.58 million to 13.78 million, and international enrollment increased from 4.09 million to 4.22 million. UnitedHealth expects a drop of about 1 million subscribers in 2017 as a result of its decision to leave certain individual markets.

The consolidated medical care ratio fell by 1.9% to 80.8% compared with the prior year quarter. For the year, the ratio dropped 0.5% to 81.2%.

The company also affirmed its 2017 financial outlook. Revenues are forecast at $197 billion to $199 billion, net earnings at $8.75 to $9.05 per share, adjusted net EPS at $9.30 to $9.60 per share, and cash flows from operations at $11.5 billion to $12 billion.

UnitedHealth said it repurchased 10 million shares of common stock in 2016 at a total of $1.28 billion. Dividend payments totaled $2.3 billion for the year, up 26.6% year over year.

The Optum health services business posted fourth-quarter revenues of $22.17 billion, up 1.2% year over year. For the full year, Optum revenues totaled $83.59 billion, up 23.6% from $67.6 billion in 2015.

Shares closed down about 0.3% last Friday, at $161.80 in a 52-week range of $108.83 to $164.00. The stock traded up about 2% at $165.00 in Tuesday’s premarket session. The consensus 12-month price target was $191.90 before results were announced.