By Amruta Khandekar and Bhanvi Satija
(Reuters) -UnitedHealth Group Inc on Thursday modestly raised its 2022 profit forecast, saying demand for healthcare procedures deferred during the pandemic was approaching normal levels but had not increased as feared.
Shares of the largest U.S. health insurer rose as much as 3% to touch a record high of $553.29 in early trading before slipping back to $542.86, up 1%.
While the company has seen pressure on earnings from costs related to COVID-19 testing and treatment, some of that was offset by people avoiding non-urgent care during the pandemic.
And some U.S. hospitals were again compelled to defer elective surgeries during the record Omicron-fueled surge in COVID-19 in the first quarter. Cases have since dropped sharply from a pandemic peak in January.
Demand for certain procedures, such as cancer screenings, have picked up pace, UnitedHealth (NYSE:UNH) said. However, emergency department and pediatric visits, which add to the health insurer's costs, were trending below normal levels, it said.
"What we haven't seen though is an expectation we had that incidence rates might come up because of missed treatments over the earlier period," Chief Financial Officer John Rex told analysts on a conference call.
UnitedHealth raised both ends of its 2022 profit forecast by 10 cents and now expects adjusted earnings of $21.20 to $21.70 per share.
Revenue at its Optum unit rose nearly 19% in the first quarter, with much of the boost coming from its medical services, the company said, adding that it was focused on improving value-based care offerings - under which healthcare providers are paid based on their value to patients - and expanding digital care and at-home services.
"The continued strength of the OptumHealth business with the ongoing transition to value-based care probably was the most noteworthy trend," said Morningstar analyst Julie Utterback.
UnitedHealth said its acquisition of home and healthcare services provider LHC Group (NASDAQ:LHCG) for about $5.4 billion would eventually add to its growth, but did not provide details.
On an adjusted basis, the company earned $5.49 per share in the first quarter, beating Wall Street estimates by 11 cents.