by Jane Anderson
UnitedHealth Group beat analysts' earnings-per-share estimate
for 2019's fourth quarter, driven by strong performance in both its
UnitedHealthcare and Optum segments.
For the full 2019 calendar year, earnings from operations grew
$2.3 billion, or 13.5% year over year to $19.7 billion, the company said. Full
year adjusted net earnings per share of $15.11 grew 17% year over year.
"Underlying results were solid, with UnitedHealthcare
(earnings $2.08 billion vs. consensus $1.88 billion) outperforming, while Optum
was roughly in line (earnings $3.02 billion)," said Oppenheimer & Co.
Inc. analyst Michael Wiederhorn in a Jan. 15 investor note.
UnitedHealth also predicted that its Medicare Advantage (MA)
business — including dual-eligibles — would grow by approximately 700,000
people in 2020. Meanwhile, United's medical loss ratio for full-year 2019 came
in at 82.5%, in line with analysts' expectations.
UnitedHealth's MA plans grew to serve 5.3 million people by the
end of 2019, up by 325,000 beneficiaries, and the company expects rapid MA
growth to continue in both the individual and group retiree markets. "We
are off to a strong start in Medicare Advantage this year," Dirk McMahon,
CEO of the UnitedHealthcare division, said during the company's earnings
conference call.
UnitedHealth's Medicaid business also is performing well, with
new contracts in Washington state, Texas and Nebraska, and more business
possible in 2020 in North Carolina and Kentucky, Wiederhorn said.
Overall, UnitedHealth Group posted $60.9 billion in revenues and
$5.1 billion in earnings from operations for the fourth quarter of 2019 for a
5.8% net margin. For all of 2019, revenues came in at $242.2 billion, while
earnings from operations were $19.7 billion, with a 5.7% net margin.
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