Optum Health earnings from operations rise to $735 million
UnitedHealth Group reported third-quarter net income of $4.11 billion, or $4.56 per share, beating analyst expectations as the healthcare company continued charting a financial turnaround under Chief Executive Stephen Hemsley, who returned to the top role more than a year ago. The Wall Street Journal’s Anna Wilde Mathews reported the results.
The earnings follow a stretch in which UnitedHealth’s valuation fell by hundreds of billions of dollars. Since Hemsley returned to the chief executive post, the company has pared unprofitable businesses, reducing the footprint of its physician-group unit and shrinking its Medicare plans. Overall health-insurance enrollment now stands at 48.3 million, down from 50.1 million a year earlier.
For the third quarter, UnitedHealth reported revenue of $112.69 billion, compared with $113.16 billion a year earlier. Adjusted earnings of $4.69 per share exceeded the $4.14 FactSet consensus.
The company raised its guidance for full-year adjusted earnings to at least $20.50 per share, up from last quarter’s projection of $19.50 to $20. Analysts polled by FactSet had estimated $19.80 per share.
UnitedHealthcare, UnitedHealth’s insurance arm, reported a medical-loss ratio of 88.4% — a closely watched metric representing the share of premiums spent on medical costs. The FactSet consensus had projected 89.7%.
Optum Health, the company’s main healthcare-provider unit and a major source of last year’s financial difficulties, reported earnings from operations of approximately $735 million, compared with $41 million a year ago. The company attributed the improvement to “strengthened operational discipline and medical cost management.” Optum Health’s revenue declined as the unit managed fewer patients in markets where its presence had been thin.
The reporting was originally published by The Wall Street Journal.