UnitedHealth’s Revenue, Profit Tops Forecasts

via WSJ

The largest U.S. health care insurer and the first to report earnings, UnitedHealth is typically viewed as a bellwether for the industry.

UnitedHealth Group Inc. reported a 56% increase in profit in the latest quarter, with results fueled by growth in its core insurance unit and its Optum health-services arm, as well as reduced impact from its money-losing Affordable Care Act business.

The Minnetonka, Minn., company reported net income of $1.90 billion, or $1.96 a share, compared with $1.22 billion, or $1.26, in the year-ago quarter. Excluding items, UnitedHealth earned $2.11 a share, compared with $1.40 a year ago. Analysts surveyed by Thomson Reuters anticipated $2.07 a share. In research notes, several analysts attributed the better-than-expected profit partly to strong investment income.

Revenue rose 9% to $47.52 billion in the fourth quarter of 2016, compared with $47.26 billion projected by analysts.

The large year-over-year gain in net income was tied partly to UnitedHealth’s move in the fourth quarter of 2015 to set aside a reserve against expected losses on its ACA exchange business, which pressured the year-ago results. The company said its enrollment in individual plans dropped sequentially in the fourth quarter of 2016, and it is largely exiting the ACA marketplaces this year, improving its outlook.

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Eric is a Producer at Lockton Insurance Brokers, Inc., the world’s largest privately held commercial broker. Eric has over 23 years of experience in the insurance industry and has spent the last 11 years with Lockton. Eric specializes in Health & Welfare Benefits, Retirement Planning, and Executive Benefits. Eric's clients utilize his expertise in the areas of Plan Due Diligence, Transaction Structure, Fiduciary Oversight, Investment Design, Compliance and Vendor negotiation to improve the operational & financial outcome for each client. The Benefit Blog is a place to share that expertise and industry news.
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