Ps 5 – UnitedHealth overcomes pandemic hit and tops 4Q expectations
UnitedHealth’s fourth-quarter earnings tumbled as prices from COVID-19 hit the medical insurance supplier, however outcomes nonetheless simply beat expectations.
Well being care use rebounded within the closing quarter of 2020 after the worldwide pandemic saved folks away from physician workplaces and surgical procedure facilities when it first unfold earlier final yr.
UnitedHealth additionally stated Wednesday that its insurance coverage enterprise spent extra within the quarter masking claims for COVID-19 testing and remedy. They accounted for 11% of all care exercise, not counting prescriptions. That’s up from 6% within the third quarter.
Medical prices, by far the corporate’s largest expense, jumped 7% to greater than $42 billion within the fourth quarter.
General internet earnings for UnitedHealth Group Inc. fell greater than 37% within the fourth quarter to $2.21 billion, and adjusted earnings totaled $2.52 per share.
That topped the common analyst forecast for earnings of $2.39 per share, in keeping with a survey of analysts by Zacks Funding Analysis.
Whole income climbed greater than 7% to $65.47 billion, additionally surpassing analyst forecasts.
The outcomes generated little shock on Wall Street after UnitedHealth gave analysts an replace on its enterprise final month. The quarter turned out “slightly better” than the steerage it supplied then, Jefferies analyst David Windley stated in a analysis observe.
UnitedHealth had stated it anticipated care use to rebound within the closing quarter of 2020, and the corporate additionally put aside reserves within the quarter to pay rebates from the decrease utilization earlier within the yr, which contributed to large insurer earnings.
UnitedHealth runs UnitedHealthcare, a medical insurance enterprise that covers greater than 48 million folks principally in america. Its Optum section additionally runs one of many nation’s largest pharmacy profit administration operations in addition to a rising variety of clinics and pressing care and surgical procedure facilities.
Working earnings from that section climbed 3% to $3.1 billion within the fourth quarter.
UnitedHealth additionally reaffirmed on Wednesday its forecast for 2021 adjusted earnings of between $17.75 and $18.25 per share. That features a per-share hit of about $1.80 resulting from rising COVID-19 prices in addition to procedures which might be being delay as a result of pandemic. The corporate’s business medical insurance enrollment additionally has been hit by excessive unemployment throughout the pandemic.
Analysts anticipate, on common, adjusted earnings to whole $18.20 per share, in keeping with FactSet.
Shares of Minnetonka, Minnesota-based UnitedHealth Group Inc. slipped lower than 1% to $350.42 in mid-morning buying and selling. The Dow Jones Industrial Common — of which UnitedHealth is a element— rose barely.
UnitedHealth’s share price is about 5% beneath the all-time excessive mark of $367.95 that it reached final November, in keeping with FactSet.
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Observe Tom Murphy on Twitter: @thpmurphy
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A portion of this story was generated by Automated Insights (http://automatedinsights.com/ap) utilizing information from Zacks Funding Analysis. Entry a Zacks stock report on UNH at https://www.zacks.com/ap/UNH
