Is UnitedHealth Poised for a Turnaround After Q1?

Health and Healthcare

Published: April 16, 2019 9:15 am

Last Updated: January 30, 2020 10:03 pm

UnitedHealth Group Inc. (NYSE: UNH) reported its first-quarter financial results before the markets opened on Tuesday. Prior to the release of this report, this firm was the second-worst performer (−7.6%) among the Dow Jones industrials in 2019. With everything seemingly going the right way now, is UnitedHealth poised for a turnaround?

The health insurance giant said that it had $3.73 in earnings per share (EPS) and $60.31 billion in revenue for the quarter. That compares with consensus estimates of $3.59 in EPS and $59.71 billion in revenue, as well as the $3.04 per share and $55.19 billion posted in the same period of last year.

In the first quarter, UnitedHealth’s revenues grew 9.3%, or $5.1 billion, year over year, led by UnitedHealthcare Medicare & Retirement, OptumRx and OptumHealth.

In terms of its segments, UnitedHealth reported as follows:

Employer & Individual revenues increased $670 million to $14.1 billion year over year.
Medicare & Retirement revenues grew by $2.2 billion, or 11.5%, to $21.1 billion.
Community & State revenues grew $511 million, or 4.8%, to $11.2 billion.
Global revenues grew $85 million, or 3.5%, to $2.5 billion.
OptumHealth revenues grew $1.0 billion, or 16.6%, to $6.7 billion.
OptumInsight revenues grew 5.8% to $2.2 billion
OptumRx revenues increased $1.7 billion, or 10.6%, to $17.8 billion.

Looking ahead to the 2019 full year, the company expects to see EPS in the range of $14.50 to $14.75. Consensus estimates call for $14.65 in EPS and $244.36 billion in revenue for the year.

David S. Wichmann, CEO of UnitedHealth, commented:

Our employees’ shared vision of improving the health of the people we serve and the performance of health systems for everyone is producing value for society and driving consistent growth for our businesses.

Shares of UnitedHealth closed Monday at $230.20, in a 52-week range of $220.77 to $287.94. The consensus price target is $306.39. Following the announcement, the stock was up about 3% at $237.10 in early trading indications Tuesday.