UnitedHealth Group Inc. UNH, the bellwether of health insurance companies, has a strong presence in the sector and is among the top five companies in the industry. This Minneapolis-based company is well known for its diversified business profile providing an array of well-being services to people through all stages of life.
UnitedHealth stands apart from its peers as it has focused on growing the less regulated business that is the health services segment named as Optum. This health service segment is like a jewel in the crown for the company and is expected to make increasing contribution to the group’s overall revenues going forward. The company’s recent acquisition of Catamaran will beef up its pharmacy benefits business, OptumRx.
While the company plans to quit the exchange business in Michigan in 2017, it already announced to exit Arkansas, Georgia exchange.
UnitedHealth has a pretty good earnings track record with the company delivering positive earnings surprises in each of the last four quarters with an average surprise of 3.9%.
Currently, UnitedHealth has a Zacks Rank #2 (Buy). We have highlighted some of the key stats from this just-revealed announcement below:
Earnings Beat: UnitedHealth beat third quarter earnings by 4.3%. Our consensus called for EPS of $2.08 and the company reported EPS of $2.17.
Revenues Beat: Revenues beat. UnitedHealth posted revenues of $46.3 billion, compared to our consensus estimate of $45.9 billion and grew 11.6% year over year.
Key Stats: Revenues from UnitedHealthcare segment came in at $37.2 billion up 13.4% year over year while the other segment – Optum posted revenue of $21.1 billion up 9.3% year over year.
Medical care ratio was 80%, decreased 60 basis points year over year.
Guidance for 2016 – UnitedHealth raised 2016 adjusted earnings to approximately $8.00 per share and GAAP earnings to about $7.45 per share, from previous range of $7.80 to $7.95 in adjusted net earnings per share and $7.25 to $7.40 in GAAP net earnings per share.
UNITEDHEALTH GP Price and EPS Surprise
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