Dow component UnitedHealth pops 1% on earnings beat

FAN Editor

UnitedHealth shares jumped 1 percent in premarket trading Tuesday after it reported fourth-quarter earnings that beat Wall Street’s expectations, helped by growth in its services business.

Here’s UnitedHealth’s results vs. what Wall Street expected:

  • Earnings: $3.28 per share vs. $3.21 per share, forecast by Refinitiv.
  • Revenue: $58.42 billion vs. $58.01 billion, forecast by Refinitiv.

Revenue from Optum, which includes the company’s pharmacy benefits management business, grew 13 percent to $27.56 billion in the fourth quarter, while revenue from its mainstay insurance business grew 11.1 percent to $46.23 billion.

The company said its full-year revenues in 2018 grew 12 percent to $226 billion. UnitedHealth reaffirmed its 2019 forecast for earnings between $14.40 and $14.70 per share.

The Hopkins, Minnesota-based company’s medical loss ratio, or the percentage of premiums paid out for medical services, was 81.6 percent in the quarter. The Street was expecting 81.8 percent.

There were “no red flags” in the report, said Ana Gupte, senior health-care services analyst Leerink Partners, on CNBC’s “Squawk Box.” That “just bodes well for the group.”

UnitedHealth, the nation’s largest health insurer, was one of a handful of Dow components trading higher ahead of earnings.

Analysts were watching for any news on the company’s acquisition strategy, which has been focused primarily on extending its Optum division’s services portfolio.

Wall Street was also expecting an update on the timing of the insurer’s acquisition of DaVita Medical Group, a leading independent medical group and a subsidiary of DaVita. The deal was first announced in December 2017.

—CNBC’s Bertha Coombs and Reuters contributed to this report.

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