UnitedHealth Sales Rise Across Segments --update
January 15 2019 - 12:09PM
Dow Jones News
By Kimberly Chin and Anna Mathews
UnitedHealth Group Inc. said sales grew in the fourth quarter as
the company continued to see diversified revenue growth from
health-care plan membership, premiums and its network of health
services.
Revenue rose 12.2% to $58.42 billion from a year ago. Analysts
polled by Refinitiv were expecting sales of $58.01 billion. Revenue
from its UnitedHealthcare segment rose by 11% to $46.2 billion
while sales from its Optum segment grew by 13% to 27.6 billion.
The parent of the nation's largest health insurer said net
earnings in the period ended Dec. 31 fell 16% to $3.04 billion, or
$3.10 a share, from a year earlier. Analysts expected the company
to earn $3.05 a share.
On an adjusted basis, UnitedHealth reported profit of $3.28 a
share, compared with analysts' estimates of $3.21 a share.
However, during UnitedHealth's earnings call, analysts focused
on the insurance unit's medical-loss ratio, which reflects the
share of premiums that goes toward medical costs. The ratio was
slightly worse than some analysts had projected.
UnitedHealth Chief Executive David Wichmann said the result was
almost exclusively tied to Medicaid performance, focused on the
Temporary Assistance for Needy Families program in five states. He
said the results were affected by both rates and cost issues, and
UnitedHealth is moving to fix both. Results on the Medicaid plans
improved in the second half of 2018 and "we expect 2019 to show
considerable additional improvement as we move that business back
to its target margin range," the CEO said.
UnitedHealth affirmed its guidance for the full year. It expects
to report earnings of $13.70 to $14 a share a share, and adjusted
earnings of $14.40 to $14.70 a share. It also expects cash flows
from operations to be between $17.3 billion and $17.8 billion.
Shares of UnitedHealth, which have gained 8.5% in the past 12
months, were up about 3% at midday to around $255.66.
Write to Kimberly Chin at kimberly.chin@wsj.com and Anna Mathews
at anna.mathews@wsj.com
(END) Dow Jones Newswires
January 15, 2019 11:54 ET (16:54 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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