the republic logo

Insurer UnitedHealth tops 3rd quarter expectations, raises 2014 forecast

bug
Share/Save/Bookmark

UnitedHealth Group's third-quarter earnings inched up 2 percent but that was enough to help the nation's largest health insurer trump Wall Street expectations and raise its 2014 forecast for the first time this year.

The Minneapolis-based insurer said Thursday that health care use continues to remain restrained, due in part to its medical management push. Revenue from its Optum information technology services business segment jumped 21 percent in the quarter.

Its shares rose more than 4 percent in afternoon trading.

Overall, UnitedHealth earned $1.6 billion, or $1.63 per share, in the quarter that ended Sept. 30. That compares to earnings of $1.57 billion, or $1.53 per share, last year. Revenue climbed 7 percent to $32.76 billion.

Analysts expected, on average, earnings of $1.53 per share on $32.68 billion in revenue, according to Zacks Investment Research.

PHOTO: FILE - This Tuesday, Oct. 16, 2012, filephoto, shows a portion of The UnitedHealth Group Inc.'s  campus in Minnetonka, Minn. UnitedHealth Group Inc. releases quarterly results before the market opens on Thursday, Oct. 16, 2014. (AP Photo/Jim Mone, File)
FILE - This Tuesday, Oct. 16, 2012, filephoto, shows a portion of The UnitedHealth Group Inc.'s campus in Minnetonka, Minn. UnitedHealth Group Inc. releases quarterly results before the market opens on Thursday, Oct. 16, 2014. (AP Photo/Jim Mone, File)

Health insurance is UnitedHealth's largest business by far, and the insurer covered nearly 45 million people in the third quarter, about 1 percent less than it did in last year's quarter. The company's biggest expense, medical costs, climbed 5 percent to $23.1 billion in the quarter after soaring 13 percent in last year's quarter.

Investors and analysts have been watching this growth for signs that it might speed up faster than insurers expect, which can affect their pricing and forecasts. UnitedHealth is the first insurer to report earnings every quarter, and many see it as a bellwether for the sector.

Revenue from UnitedHealth's Optum business climbed to $12 billion in the third quarter.

The insurer now expects full-year, 2014 earnings to range between $5.60 and $5.65 per share. That's up from its previous forecast for $5.50 to $5.60 per share.

Analysts expect $5.58 per share.

Shares of UnitedHealth, a component of the Dow Jones industrial average, rose $3.49, or 4.3 percent, to $85.66 in late afternoon trading. Its shares had climbed 9 percent so far this year through Wednesday's close and have set several all-time high prices in 2014. It traded as high as $88.85 in early September.

Think your friends should see this? Share it with them!

Story copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Feedback, Corrections and Other Requests: AP welcomes feedback and comments from readers. Send an email to info@ap.org and it will be forwarded to the appropriate editor or reporter.


We also have more stories about:
(click the phrases to see a list)

Category:

Follow The Republic:

All content copyright ©2014 The Republic, a division of Home News Enterprises unless otherwise noted.
All rights reserved. Privacy policy.