Executives told
investors today that its health services business is expected to provide faster
growth in earnings, revenue.
UnitedHealth
Group is projecting revenue growth to pick up a bit next year led by its Optum
division for health care services, which includes a fast-growing network of
medical clinics and surgery centers.
The
Minnetonka-based company, which is Minnesota's largest in terms of revenue,
provided its first financial outlook for 2020 during an investor conference
Tuesday in New York.
Chief
executive David Wichmann said the numbers show how UnitedHealth has diversified
beyond the core health benefits business at company's UnitedHealthcare
division, which is the nation's largest health insurer.
"UnitedHealth
Group is a fundamentally different company than the commercial insurance
company I joined 22 years ago," Wichmann said. "With more than 50% of
earnings coming from Optum in 2020, it's a good time to reflect on the
accelerating impact diversification has had on the capacities of UnitedHealth
Group, now a broad-based health care company."
UnitedHealth
Group now expects 2019 revenue of about $242 billion with adjusted net earnings
of nearly $15 per share, which is at the higher end of the company's most
recent earnings guidance, according to a statement issued Monday evening.
Adjusted earnings exclude certain expenses related to acquisitions.
For
2020, the company forecasts revenue of $260 billion to $262 billion and
adjusted net earnings of $16.25 to $16.55 per share. Analysts surveyed by
Refinitiv were expecting revenue in a range of $255.6 billion to $266.7
billion, and earnings per share between $16.25 and $16.75.
Enrollment
in UnitedHealthcare health plans is expected to grow to roughly 50 million
people next year, led by gains in benefits for people covered by the
government-sponsored Medicare and Medicaid health insurance programs.
Enrollment is expected to hold roughly steady or decline a bit among companies
that hire UnitedHealthcare to run employer-sponsored health plans.
In
addition to a division for clinics and surgery centers, Optum runs a business
called OptumInsight that provides IT and data consulting as well as a
pharmaceutical benefits manager called OptumRx.
UnitedHealth
shares were off $1.93 in late morning trading, to $277.73. Shares are up about
14% since the beginning of the year.
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