- Revenues of $70.2 Billion Grew 9%, led by Balanced Growth at
Optum and UnitedHealthcare
- Earnings from Operations Grew 35% to $6.7 Billion
- Cash Flows from Operations were $6.0 Billion or 1.2x Net
Income
- Net Earnings were $5.08 Per Share and Adjusted Earnings were
$5.31 Per Share
Strong, well-diversified business performance contributed to
growth across UnitedHealth Group (NYSE: UNH) in the first quarter
2021, even as the Company continued to support consumers, customers
and the broader health system in the pandemic response.
“The unique combined capabilities of Optum and UnitedHealthcare
and the unwavering commitment of our people continue to help
advance the way care is delivered, improving results for those we
serve and shareholders,” said Andrew Witty, chief executive officer
of UnitedHealth Group.
Based upon initial 2021 business performance trends, the Company
increased its full year net earnings outlook to $17.15 to $17.65
per share and adjusted earnings to $18.10 to $18.60 per share. This
outlook continues to include approximately $1.80 per share in
potential net unfavorable impact to accommodate continuing COVID-19
effects, such as: testing and treatment costs; the residual impact
of people having deferred care in 2020; and unemployment and other
economy-driven factors. COVID-19 treatment and testing during the
quarter was higher than expected, paired with higher elective care
deferral patterns. UnitedHealth Group is focused on encouraging and
helping people to obtain the care they need, including
vaccinations, and expects a continued rise in provision of care as
the year progresses. The Company has provided support to ensure
continued stability of the health system in response to the
pandemic. For more information about UnitedHealth Group’s response
to COVID-19, go to
https://www.unitedhealthgroup.com/newsroom/addressing-covid.html.
Quarterly Financial Performance
Three
Months Ended
March 31,
2021
March 31,
2020
December 31,
2020
Revenues
$70.2 billion
$64.4 billion
$65.5 billion
Earnings from Operations
$6.7 billion
$5.0 billion
$3.5 billion
Net Margin
6.9%
5.2%
3.4%
- UnitedHealth Group’s first quarter 2021 revenues of $70.2
billion grew $5.8 billion or 9.0% year-over-year, reflecting
broad-based growth across Optum and UnitedHealthcare.
- First quarter 2021 earnings from operations grew $1.7 billion
or 34.9% year-over-year to $6.7 billion, with both Optum and
UnitedHealthcare contributing to the expansion.
- The first quarter medical care ratio of 80.9% compared to 81.0%
in first quarter 2020. Favorable medical reserve development was
$1.0 billion in the quarter compared to $850 million in the fourth
quarter 2020 and $580 million in the first quarter last year. Days
claims payable of 49.8 days compared to 47.8 days in the fourth
quarter 2020 and 50.5 days in the first quarter 2020.
- The first quarter 2021 operating cost ratio of 14.6% decreased
from 15.5% in first quarter 2020 due to the repeal of the health
insurance tax and continued operating efficiency gains, partially
offset by business mix, and increased service, growth and
innovation investments.
- Cash flows from operations in first quarter 2021 were $6.0
billion, or 1.2 times net income.
- Return on equity of 29.5% in the quarter reflected the
Company’s strong overall operating performance and efficient
capital structure.
UnitedHealthcare provides health care benefits globally, serving
individuals and employers, and Medicare and Medicaid beneficiaries.
UnitedHealthcare is dedicated to improving the value consumers
receive by reducing the total cost of care, enhancing the quality
of care received, improving health and wellness and simplifying the
health care experience.
Quarterly Financial Performance
Three
Months Ended
March 31,
2021
March 31,
2020
December 31,
2020
Revenues
$55.1 billion
$51.1 billion
$50.3 billion
Earnings from Operations
$4.1 billion
$2.9 billion
$396 million
Operating Margin
7.5%
5.7%
0.8%
- UnitedHealthcare first quarter revenues of $55.1 billion grew
by $4.0 billion or 7.9% compared to last year, led by continued
growth in people served by community and senior programs.
- In the first quarter 2021, people served by UnitedHealthcare
grew by more than 1 million since the end of 2020.
- First quarter 2021 operating earnings were $4.1 billion
compared to $2.9 billion last year, reflecting growth in people
served and the absence of an extra calendar day which impacted
first quarter 2020.
- Growth highlights include: strong individual Medicare Advantage
membership growth during the annual enrollment period, several
large new Group MA business wins and growth in people served in
Dual Special Needs Plans; a Medicaid contract award in Oklahoma to
serve TANF, CHIP and expansion populations across the state; and
continued strong growth in specialty products, including dental and
vision, and a strong commercial benefits selling season.
Optum is a health services business serving the global health
care marketplace, including payers, care providers, employers,
governments, life sciences companies and consumers. Using
market-leading information, data analytics, technology and clinical
insights, Optum helps improve overall health system performance:
optimizing care quality, reducing health care costs and improving
the consumer experience.
Quarterly Financial Performance
Three
Months Ended
March 31,
2021
March 31,
2020
December 31,
2020
Revenues
$36.4 billion
$32.8 billion
$35.9 billion
Earnings from Operations
$2.6 billion
$2.1 billion
$3.1 billion
Operating Margin
7.2%
6.4%
8.7%
- Optum first quarter revenues grew 10.8% to $36.4 billion and
operating earnings grew 24.8% to $2.6 billion.
- OptumHealth revenue per consumer served increased 31%
year-over-year during the first quarter 2021, driven by growth in
the number of people served in value-based care arrangements and
increasing acuity of the care services provided. OptumHealth served
99 million people at the end of first quarter 2021 compared to 96
million people a year ago.
- OptumInsight’s revenue backlog increased by $1.6 billion in the
first quarter to $20.8 billion, driven by growth in comprehensive
managed services, including revenue management, payment integrity,
information technology and data analytics. As previously announced,
the OptumInsight and Change Healthcare (NASDAQ: CHNG) combination
is expected to close during the second half 2021. This combination
will more effectively connect and simplify core clinical,
administrative and payment processes, resulting in better health
outcomes and experiences for users, at lower cost.
- OptumRx revenues and earnings grew modestly compared to the
first quarter of 2020 and adjusted scripts were 329 million
compared to 339 million last year. First quarter 2020 included the
advance provision of medications to people served in response to
COVID-related supply concerns, with script levels then receding
with care deferral patterns.
- Growth highlights include: continued expansion of Optum Care’s
integrated local care delivery networks, including expanded digital
capabilities and strong growth serving seniors across in-home,
clinic-based and other ambulatory care settings; OptumInsight new
business wins, contract extensions and pipeline growth in
comprehensive managed services; strong execution at OptumRx
onboarding hundreds of new clients and continued growth and
diversification of pharmacy care services, including
community-based behavioral health pharmacies, alternate site
infusion services, e-commerce, specialty pharmacy, prescription
discount cards and multi-dose packaging.
About UnitedHealth Group
UnitedHealth Group (NYSE: UNH) is a diversified health care
company dedicated to helping people live healthier lives and
helping make the health system work better for everyone.
UnitedHealth Group offers a broad spectrum of products and services
through two distinct platforms: Optum, which provides information
and technology-enabled health services; and UnitedHealthcare, which
provides health care coverage and benefits services. For more
information, visit UnitedHealth Group at www.unitedhealthgroup.com
or follow @UnitedHealthGrp on Twitter.
Earnings Conference Call
As previously announced, UnitedHealth Group will discuss the
company’s results, strategy and future outlook on a conference call
with investors at 8:45 a.m. Eastern Time today. UnitedHealth Group
will host a live webcast of this conference call from the Investor
Relations page of the company’s website
(www.unitedhealthgroup.com). Following the call, a webcast replay
will be available on the same site through April 29, 2021. The
conference call replay can also be accessed by dialing
1-855-859-2056, Conference ID: 2769667. This earnings release and
the Form 8-K dated April 15, 2021 can also be accessed from the
Investor Relations page of the Company’s website.
Non-GAAP Financial
Information
This news release presents non-GAAP financial information
provided as a complement to the results provided in accordance with
accounting principles generally accepted in the United States of
America (“GAAP”). A reconciliation of the non-GAAP financial
information to the most directly comparable GAAP financial measure
is provided in the accompanying tables found at the end of this
release.
Forward-Looking
Statements
The statements, estimates, projections, guidance or outlook
contained in this document include “forward-looking” statements
which are intended to take advantage of the “safe harbor”
provisions of the federal securities law. The words “believe,”
“expect,” “intend,” “estimate,” “anticipate,” “forecast,”
“outlook,” “plan,” “project,” “should” and similar expressions
identify forward-looking statements. These statements may contain
information about financial prospects, economic conditions and
trends and involve risks and uncertainties. Actual results could
differ materially from those that management expects, depending on
the outcome of certain factors including: risks associated with
public health crises, large-scale medical emergencies and
pandemics, such as the COVID-19 pandemic; our ability to
effectively estimate, price for and manage medical costs; new or
changes in existing health care laws or regulations, or their
enforcement or application; the DOJ’s legal action relating to the
risk adjustment submission matter; our ability to maintain and
achieve improvement in quality scores impacting revenue; reductions
in revenue or delays to cash flows received under government
programs; changes in Medicare, the CMS star ratings program or the
application of risk adjustment data validation audits; failure to
maintain effective and efficient information systems or if our
technology products do not operate as intended; cyberattacks, other
privacy/data security incidents, or our failure to comply with
related regulations; risks and uncertainties associated with the
pharmacy benefits management industry; competitive pressures;
changes in or challenges to our public sector contract awards; our
ability to contract on competitive terms with physicians, hospitals
and other service providers; failure to attract, develop, retain,
and manage the succession of key employees and executives; the
impact of potential changes in tax laws and regulations (including
any increase in the U.S. income tax rate applicable to
corporations); failure to achieve targeted operating cost
productivity improvements; increases in costs and other liabilities
associated with litigation, government investigations, audits or
reviews; failure to manage successfully our strategic alliances or
complete or receive anticipated benefits of strategic transactions;
fluctuations in foreign currency exchange rates; downgrades in our
credit ratings; our investment portfolio performance; impairment of
our goodwill and intangible assets; and our ability to obtain
sufficient funds from our regulated subsidiaries or from external
financings to fund our obligations, maintain our debt to total
capital ratio at targeted levels, maintain our quarterly dividend
payment cycle, or continue repurchasing shares of our common stock.
This above list is not exhaustive. We discuss these matters, and
certain risks that may affect our business operations, financial
condition and results of operations more fully in our filings with
the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By
their nature, forward-looking statements are not guarantees of
future performance or results and are subject to risks,
uncertainties and assumptions that are difficult to predict or
quantify. Actual results may vary materially from expectations
expressed or implied in this document or any of our prior
communications. You should not place undue reliance on
forward-looking statements, which speak only as of the date they
are made. We do not undertake to update or revise any
forward-looking statements, except as required by law.
UNITEDHEALTH GROUP Earnings Release Schedules and
Supplementary Information Quarter Ended March 31, 2021
- Condensed Consolidated Statements of Operations -
Condensed Consolidated Balance Sheets - Condensed Consolidated
Statements of Cash Flows - Supplemental Financial Information -
Businesses - Supplemental Financial Information - Business Metrics
- Reconciliation of Non-GAAP Financial Measure
UNITEDHEALTH
GROUP CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data) (unaudited)
Three Months Ended March
31,
2021
2020
Revenues Premiums
$55,486
$50,640
Products
8,340
8,431
Services
5,918
4,985
Investment and other income
452
365
Total revenues
70,196
64,421
Operating costs Medical costs
44,904
41,000
Operating costs
10,223
10,015
Cost of products sold
7,572
7,687
Depreciation and amortization
758
723
Total operating costs
63,457
59,425
Earnings from operations
6,739
4,996
Interest expense
(397)
(437)
Earnings before income taxes
6,342
4,559
Provision for income taxes
(1,364)
(1,094)
Net earnings
4,978
3,465
Earnings attributable to noncontrolling interests
(116)
(83)
Net earnings attributable to UnitedHealth Group common
shareholders
$4,862
$3,382
Diluted earnings per share attributable to UnitedHealth Group
common shareholders
$5.08
$3.52
Adjusted earnings per share attributable to UnitedHealth Group
common shareholders (a)
$5.31
$3.72
Diluted weighted-average common shares outstanding
957
962
(a)
See page 6 for a reconciliation
of the non-GAAP measure
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in millions)
(unaudited)
March 31,
December 31,
2021
2020
Assets Cash and short-term investments
$22,917
$19,781
Accounts receivable, net
15,980
12,870
Other current assets
20,611
21,067
Total current assets
59,508
53,718
Long-term investments
42,406
41,242
Other long-term assets
103,257
102,329
Total assets
$205,171
$197,289
Liabilities, redeemable noncontrolling interests and equity
Medical costs payable
$24,833
$21,872
Short-term borrowings and current maturities of long-term debt
8,838
4,819
Other current liabilities
46,970
45,729
Total current liabilities
80,641
72,420
Long-term debt, less current maturities
37,420
38,648
Other long-term liabilities
16,528
15,682
Redeemable noncontrolling interests
1,269
2,211
Equity
69,313
68,328
Total liabilities, redeemable noncontrolling interests and equity
$205,171
$197,289
UNITEDHEALTH GROUP CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS (in millions) (unaudited)
Three Months Ended March
31,
2021
2020
Operating Activities Net earnings
$4,978
$3,465
Noncash items: Depreciation and amortization
758
723
Deferred income taxes and other
286
247
Share-based compensation
256
231
Net changes in operating assets and liabilities
(273)
(1,723)
Cash flows from operating activities
6,005
2,943
Investing Activities (Purchases of investments, net of sales
and maturities) Sales and maturities, net of purchases
(1,714)
30
Purchases of property, equipment and capitalized software
(568)
(469)
Cash paid for acquisitions, net
(1,193)
(929)
Other, net
(232)
(165)
Cash flows used for investing activities
(3,707)
(1,533)
Financing Activities Common share repurchases
(1,650)
(1,691)
Dividends paid
(1,181)
(1,024)
Net change in short-term borrowings and long-term debt
2,907
10,797
Other, net
711
1,221
Cash flows from financing activities
787
9,303
Effect of exchange rate changes on cash and cash equivalents
(51)
(129)
Increase in cash and cash equivalents
3,034
10,584
Cash and cash equivalents, beginning of period
16,921
10,985
Cash and cash equivalents, end of period
$19,955
$21,569
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESSES (in millions, except percentages) (unaudited)
Three Months Ended March
31,
2021
2020
Revenues UnitedHealthcare
$55,114
$51,068
Optum
36,384
32,839
Eliminations
(21,302)
(19,486)
Total consolidated revenues
$70,196
$64,421
Earnings from Operations UnitedHealthcare
$4,108
$2,888
Optum (a)
2,631
2,108
Total consolidated earnings from operations
$6,739
$4,996
Operating Margin UnitedHealthcare
7.5%
5.7%
Optum
7.2%
6.4%
Consolidated operating margin
9.6%
7.8%
Revenues UnitedHealthcare Employer & Individual
$14,632
$14,280
UnitedHealthcare Medicare & Retirement
25,474
23,152
UnitedHealthcare Community & State
12,973
11,453
UnitedHealthcare Global
2,035
2,183
OptumHealth
$12,403
$9,192
OptumInsight
2,852
2,494
OptumRx
21,604
21,557
Optum eliminations
(475)
(404)
(a)
Earnings from operations for
Optum for the three months ended March 31, 2021 and 2020 included
$962 and $712 for OptumHealth; $779 and $536 for OptumInsight; and
$890 and $860 for OptumRx, respectively.
UNITEDHEALTH GROUP SUPPLEMENTAL FINANCIAL INFORMATION -
BUSINESS METRICS UNITEDHEALTHCARE CUSTOMER
PROFILE (in thousands)
People Served March
31,2021 December 31,2020 March 31,2020
Commercial: Risk-based
7,860
7,910
8,215
Fee-based
18,455
18,310
18,825
Total Commercial
26,315
26,220
27,040
Medicare Advantage
6,335
5,710
5,575
Medicaid
6,975
6,620
5,880
Medicare Supplement (Standardized)
4,390
4,460
4,440
Total Community and Senior
17,700
16,790
15,895
Total UnitedHealthcare - Domestic Medical
44,015
43,010
42,935
Global
5,460
5,425
5,605
Total UnitedHealthcare - Medical
49,475
48,435
48,540
Supplemental Data Medicare Part D stand-alone
3,795
4,045
4,150
OPTUM PERFORMANCE METRICS March 31,2021
December 31,2020 March 31,2020 OptumHealth Consumers
Served (in millions)
99
98
96
OptumInsight Contract Backlog (in billions)
$20.8
$20.2
$19.2
OptumRx Quarterly Adjusted Scripts (in millions)
329
331
339
Note: UnitedHealth Group served 145
million unique individuals across all businesses at March 31,
2021.
UNITEDHEALTH GROUP RECONCILIATION OF NON-GAAP FINANCIAL
MEASURE (in millions, except per share data) (unaudited)
ADJUSTED NET EARNINGS PER SHARE(a)
Three Months Ended March
31,
Projected Year Ended December
31,
2021
2020
2021
GAAP net earnings attributable to UnitedHealth Group common
shareholders
$4,862
$3,382
$16,300 - $16,850 Intangible amortization
294
265
~1,190 Tax effect of intangible amortization
(71)
(65)
~(290) Adjusted net earnings attributable to UnitedHealth Group
common shareholders
$5,085
$3,582
$17,200 - $17,750 GAAP diluted earnings per share
$5.08
$3.52
$17.15 - $17.65 Intangible amortization per share
0.31
0.27
~1.25 Tax effect per share of intangible amortization
(0.08)
(0.07)
~(0.30) Adjusted diluted earnings per share
$5.31
$3.72
$18.10 - $18.60
(a)
Adjusted net earnings per share
is a non-GAAP financial measure. Non-GAAP financial measures should
be considered in addition to, but not as a substitute for, or
superior to, financial measures prepared in accordance with
GAAP.
Adjusted net earnings per share excludes
from the relevant GAAP metric, as applicable, intangible
amortization and other items, if any, that do not relate to the
Company's underlying business performance. Management believes that
the use of adjusted net earnings per share provides investors and
management useful information about the earnings impact of
acquisition-related intangible asset amortization. As amortization
fluctuates based on the size and timing of the Company’s
acquisition activity, management believes this exclusion provides a
more useful comparison of the Company's underlying business
performance and trends from period to period. While intangible
assets contribute to the Company’s revenue generation, the
intangible amortization is not directly related. Therefore, the
related revenues are included in adjusted earnings per share.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210415005345/en/
Investors: Brett Manderfeld Senior Vice President
952-936-7216
Media: Matt Stearns Senior Vice President
202-276-0085
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