Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

UnitedHealth beats first-quarter profit view, raises 2019 forecast

Stock MarketsApr 16, 2019 09:22AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. FILE PHOTO: Traders work at the post where UnitedHealth Group is traded on the floor of the NYSE in New York

(Reuters) - UnitedHealth Group Inc (NYSE:UNH) on Tuesday reported a quarterly profit above estimates and raised its 2019 earnings forecast on increased prescription volumes at its pharmacy benefits unit, sending shares of the largest U.S. health insurer up 3 percent.

The results eased some pressure on the health insurance sector where stocks have taken a beating in the past few weeks over policy-related uncertainty. Shares of rivals Anthem (NYSE:ANTM) Inc, Centene (NYSE:CNC) Corp, Humana Inc (NYSE:HUM) and Cigna Corp (NYSE:CI) were also up in light trading.

The uncertainty has largely resulted from proposals to change the drug-rebate system under which drugmakers refund money to insurers and pharmacy benefit managers.

Analysts said the industry bellwether's quarterly results reinforce that underlying fundamentals for the sector remain fully on track, despite the recent slump in share prices.

Optum, UnitedHealth's fastest-growing unit which houses its pharmacy benefits business, brought in sales of $26.36 billion in the quarter, a jump of nearly 12 percent from a year earlier due to higher prescription volumes.

UnitedHealth on Tuesday also raised its full-year adjusted earnings forecast to between $14.50 and $14.75 per share from its prior view of $14.40 to $14.70.

"We find this notable, as UnitedHealth has historically been conservative in adjusting guidance early in the year," Cantor Fitzgerald analyst Steven Halper said.

Last year, rivals Cigna Corp and Aetna (NYSE:AET) combined with Optum's two largest rivals, Express Scripts (NASDAQ:ESRX) Holding and CVS Health Corp (NYSE:CVS).

In its health insurance business, UnitedHealth's medical care ratio, which compares premiums with the cost of delivering medical care, worsened to 82 percent, from 81.4 percent last year, on deferral of the health insurance tax, the company said. Analysts on average were expecting 82.2 percent.

In the quarter ended March 31, net earnings rose 22.2 percent to $3.47 billion, or $3.56 per share.

The company reported adjusted earnings of $3.73 per share, beating estimates of $3.60 per share, according to IBES data from Refinitiv.

Total revenue rose 9.3 percent to $60.31 billion, ahead of estimates of $59.71 billion.

Evercore ISI analyst Michael Newshel said UnitedHealth continues to deliver consistent performance and fundamentals still look good.

"But now the question is whether any rebound in the shares can be sustained amid the political overhang that has plagued the managed care group."

UnitedHealth's shares were up 2.66 percent at $236.32 in pre-market trading. As of Monday's close, the stock is down nearly 8 percent in 2019.

UnitedHealth beats first-quarter profit view, raises 2019 forecast

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email