UnitedHealth Q2 Results Beat View, Lifts FY Outlook

(RTTNews) - Health insurer UnitedHealth Group (UNH) Thursday said its second-quarter profit increased from the prior year and topped estimates. Revenues also improved year-over-year and breezed past expectations, with both UnitedHealthcare and Optum revenues growing by double digit percentages. Further, the company lifted its full-year forecast.

Stephen Hemsley, chief executive officer of UnitedHealth Group, said, "We are seeing consistent growth in response to our continuing focus on improving the ways we serve people and the health care system as a whole..."

Net earnings increased to $1.585 billion from the prior year's $1.408 billion. Earnings per share improved to $1.64 from $1.42 last year.

On average, 20 analysts polled by Thomson Reuters expected the company to report earnings of $1.59 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues increased 11 percent to $36.3 billion from $32.6 billion in the prior year. Wall Street analysts were looking for revenue of $35.66 billion for the quarter.

Revenue growth was broad-based, with both UnitedHealthcare and Optum revenues growing by double digit percentages, primarily due to organic growth in consumers served.

Businesswise, UnitedHealthcare's second-quarter revenue climbed 10 percent to $33.1 billion. In the UnitedHealthcare Employer & Individual segment, revenues climbed 10 percent, reflecting growth in the number of people served and price increases, partially offset by a continuing market move to lower price point products, including public exchange offerings.

Meanwhile, UnitedHealthcare Medicare & Retirement revenues grew 7 percent and UnitedHealthcare Community & State revenues increased 25 percent.

During the quarter, Medical membership rose to 45,860 from 44,935.

Optum, a health services business serving the broad health care marketplace, reported a 16 percent growth in revenue to $13.6 billion as each reporting segment grew revenues by a double-digit percentage.

Within the business, OptumHealth revenues climbed 33 percent due to growth in the number of patients served across its OptumCare health care delivery businesses, as well as business expansion in population health management services for payers.

OptumInsight revenues improved 13 percent, driven by expansion and growth in care provider revenue and administrative management services.

OptumRx revenues grew 11 percent, as second quarter script volumes increased more than 4 percent to nearly 150 million adjusted scripts.

Further, the company updated its 2015 financial outlook to include the expected Catamaran Corp. combination, which is expected to close in July.

Reflecting strength in business performance, the company now expects net earnings in a range of $6.25 to $6.35 per share, an increase from the prior outlook of $6.15 to $6.30 per share.

This included the previously disclosed effects of transaction costs and moderated share repurchase activity related to the Catamaran acquisition. Catamaran's impact on earnings over the balance of 2015 is expected to be fully offset by interest, amortization and integration costs.

UnitedHealth projects 2015 revenues of $154 billion, an increase of $11 billion from the previous outlook.

Wall Street currently is looking for fiscal year 2015 earnings of $6.26 per share on annual revenues of $143.60 billion.

The stock slipped 0.7 percent on Wednesday to close at $125.86.