UnitedHealth Q4 Results Beat Estimates, Backs FY14 View

(RTTNews) - Health insurer UnitedHealth Group Inc. (UNH) Thursday reported a higher fourth-quarter profit, reflecting growth in revenue, margin expansion and steady enrollment growth in each of its benefits businesses. Both earnings per share and revenues beat analysts' expectations. The company also backed its outlook for full-year 2014.

Stephen Hemsley, president and chief executive officer of the company said, "In 2013 the quality and diversity of our products and services across the health care system - and the distinctive value received from those services - drove exceptional growth."

For the fourth quarter, net earnings attributable to shareholders increased to $1.43 billion or $1.41 per share from $1.24 billion or $1.20 per share in the previous year.

On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $1.40 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter climbed to $31.12 billion from $28.77 billion in the prior-year quarter, and came above analysts' consensus estimate of $31.06 billion.

UnitedHealthcare segment's revenues increased to $28.81 billion from $26.86 billion a year ago. Optum, its health services business, generated revenues of $10.20 billion, higher than $7.53 billion in the same quarter last year.

Net margin improved to 4.6 percent from 4.3 percent a year earlier.

Fourth-quarter 2013 medical care ratio increased 70 basis points year-over-year to 81.2 percent.

For the full year, the company posted net earnings attributable to shareholders of $5.63 billion or $5.50 per share, higher than $5.53 billion or $5.28 per share in the prior year. Annual revenues grew 11 percent to $122.49 billion.

UnitedHealthcare generated organic enrollment growth of more than 4.5 million people in total, increasing the number of people it serves across all major market categories - commercial, military, Medicare, Medicaid and international - which helped 10 percent growth in its annual revenues in 2013.

UnitedHealthcare served more than 4 1/2 million additional people in 2013, including 170,000 consumers in the fourth quarter. Overall, the company served nearly 90 million people in 2013.

For 2014, the company continues to estimate net earnings in the range of $5.40 to $5.60 per share, and revenues of $128 billion to $129 billion. Street currently looks for 2014 earnings of $5.62 per share, on revenues of $131.27 billion.

UNH closed Wednesday's regular trading at $74.84 on the NYSE.