UnitedHealth Group Q4 Results Top View

(RTTNews) - Health insurer UnitedHealth Group Inc. (UNH) Wednesday reported increased fourth-quarter earnings and revenues that topped estimates. The company said the results were highlighted by exceptional revenue growth in the Optum business, margin expansion and earnings advances as well as broad-based strength in UnitedHealthcare's public and senior sector benefits business.

Net earnings attributable to shareholders advanced to $1.510 billion from last year's $1.427 billion. Earnings per share were $1.55, compared to $1.41 in the previous year.

On average, 22 analysts polled by Thomson Reuters expected earnings of $1.50 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues grew to $33.43 billion from $31.12 billion. Analysts expected revenues of $33.11 billion.

Premiums generated revenues of $29.38 million, compared to $27.71 million in the previous year. Services revenues advanced to $2.765 billion from $2.361 billion.

In the UnitedHealthcare business, which provides health care benefits to individuals and employers, revenues improved 6 percent to $30.4 billion. Within the segment, UnitedHealthcare Community & State generated $6.5 billion, up 37 percent from last year.

In Optum, fourth-quarter revenues jumped 23 percent to $12.9 billion. Optum serves the broad health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers.

Medical care ratio decreased 140 basis points to 79.8 percent, due to the impact of ACA fees and improved premium yields, partially offset by business mix.

The company estimates rising net earnings per share growth in 2015, in a range of $6.00 to $6.25 per share. Revenues are estimated in a range of $140.5 billion to $141.5 billion.

Wall Street looks for earnings of $6.17 per share on revenues of $140.90 billion.

Stephen Hemsley, CEO, said, "We enter 2015 with a positive outlook and rising business momentum. Steady innovation and year by year advances in the quality, breadth and value of our services to employers, government sponsors, consumers and care providers are creating opportunities for revenue and earnings growth in traditional and new markets."

UNH closed at $105.62 on Tuesday, and gained 1.7 percent in pre-market activity.