Unitedhealth (UNH) Delivers Q3 'Beat-and-Raise'; Revs Jump 9.1% Y/Y


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Unitedhealth Group, Inc. ( UNH ) reported their third quarter earnings results today, reporting stronger revenue led by both their Health Benefits and Health Services business groups.

The Minnetonka, MN-based company reported revenues of $23.67 billion for the quarter, a 9.1% jump from $21.7 billion in revs reported for the same quarter last year, and 1.8% increase from $23.26 billion last quarter. The Street was anticipating revs of $23.28 billion. Four of the company's business units, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, Ingenix and Prescription Solutions, increased their revs by over 10% Y/Y.

Earnings for the quarter were $1.3 billion, producing an EPS of $1.14, on $2.1 billion in earnings from operations. The number comes in higher than the Street consensus of $0.84, and 48.1% higher than $0.77 reported in Q309.

Net margins improved to 5.4%, from 4.8% in both Q210 and Q309. Operating costs increased 50 basis points to 15%, due in part to increased expenditures on reputational advertising, a higher overall mix of more operating-cost-intensive Health Service revenues, costs related to an increase in employee headcount and compensation, and the absorption of new business development and startup costs.

Unitedhealth increased their FY10 net EPS outlook from $3.40 - $3.60 last quarter to $3.85 - $3.95 in this quarter. FY10 revs are now expected to approach $94 billion, from an outlook of $93 billion last quarter.

The Street is looking for an EPS of $3.60 and revs of $92.87 billion.

CEO and President Stephen J. Hemsley commented "Fundamental execution, increasing business diversity, and on-going product and service innovation continue to be key elements anchoring the Company's sustained growth. [Revs] increased by $2 billion year-over-year, driven by a growing number of customers in a wide array of market segments selecting more offerings from our Health Benefits and Health Services business platforms. We are committed to meeting changing customer needs as these markets evolve."

UNH shares are trading1.8% lower premarket today.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Stocks

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