UnitedHealth Q3 Tops Estimates, Backs Full-year Earnings View

(RTTNews) - Health insurer UnitedHealth Group (UNH) Thursday reported a profit for the third quarter that was unchanged from last year, as a 27 percent increase in revenues was partially offset by higher operating costs. However, both earnings and revenues topped Wall Street estimates.

UnitedHealthcare's revenues grew 9 percent in the quarter with a 12 percent growth in domestic revenues.

At Optum, a health services business serving the broad health care marketplace, revenues jumped 61 percent as each reporting segment grew revenues by a double-digit percentage.

The consolidated medical care ratio increased 90 basis points to 80.6 percent. This was due to increased medical spending for Medicare Star quality performance, an increased mix of government-sponsored benefits business and lower levels of reserve development.

Stephen Hemsley, CEO, said, "Our 2015 results are reflecting balanced growth across a diversity of businesses and product categories. We believe this growth will continue because we are serving people more effectively, simplifying their health care experiences, and offering practical innovations that help deliver more value to the consumer and the health care system as a whole."

Net income to shareholders was $1.6 billion or $1.65 per share, compared to $1.6 billion or $1.63 per share reported in the prior year.

On average, 21 analysts polled by Thomson Reuters expected the company to report profit per share of $1.64 for the quarter. Analysts' estimates typically exclude special items.

Revenue increased to $41.5 billion from $32.8 billion last year. Analysts expected revenue of $40.17 billion for the quarter.

Operating costs climbed to $38.47 billion from $29.9 billion last year, mainly due to increased cost of products sold.

The company continues to project 2015 net earnings in a range of $6.25 to $6.35 per share. Analysts expect the company to report earnings per share of $6.33.

The stock closed down 1.6 percent on Wednesday at $122.07.