Health and Healthcare
UnitedHealth Lifts Low-End of EPS Forecast After Solid Earnings
Published:
Last Updated:
UnitedHealth Group Inc. (NYSE: UNH) reported second-quarter 2016 results before markets opened Tuesday. The health insurance and benefits management firm posted adjusted diluted earnings per share (EPS) of $1.96 on revenues of $46.5 billion. In the same period a year ago, UnitedHealth reported EPS of $1.73 on revenues of $36.26 billion. Second-quarter results also compare to the consensus estimates for EPS of $1.89 on revenues of $45.05 billion.
Total enrollment numbers increased year-over-year from 45.86 million to 47.98 million. Commercial enrollments rose from 29.4 million to 30.49 million. Medicare and Medicaid enrollment rose from 12.38 million to 13.44 million, and international enrollment slipped from 4.08 million to 4.05 million.
The consolidated medical care ratio rose by 0.3% to 82% for the quarter, and it included more than 50 basis points or approximately $200 million of additional full-year losses from ACA-compliant individual products above previous projections and fully absorbed within second quarter results.
The company narrowed its EPS range from a prior outlook of $7.75 to $7.95 to a new range of $7.80 to $7.95.
UnitedHealth repurchased $980 million worth of its common stock in the second quarter and raised its annual dividend payment by 26% to $2.50 per share.
In the company’s UnitedHealthcare insurance business, revenues grew by $1.7 billion year over year in the quarter. Profits were down 4% year over year and operating margin fell from 6.1% to 5.2%, primarily due to the ACA-related loss.
The Optum health services business posted second-quarter revenues of $20.6 billion, up 52% year over year. Earnings from operations improved by 46%. The company attributed the increases to strong growth in pharmacy care services. Operating margin decreased by 30 basis points year over year to 6.1%.
Shares closed down about 0.4% on Monday, at $40.75 in a 52-week range of $95.00 to $142.96. The stock price was unchanged in Tuesday’s premarket session. Thomson Reuters had a consensus analyst price target of $152.05 before results were announced.
Get Ready To Retire (Sponsored)
Start by taking a quick retirement quiz from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes, or less.
Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Here’s how it works:
1. Answer SmartAsset advisor match quiz
2. Review your pre-screened matches at your leisure. Check out the advisors’ profiles.
3. Speak with advisors at no cost to you. Have an introductory call on the phone or introduction in person and choose whom to work with in the future
Get started right here.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
