UnitedHealth earnings rise 6 pct, top Wall St. expectations
UnitedHealth's fourth-quarter earnings rose nearly 6 percent in a performance that topped Wall Street expectations, and the nation's largest health insurer brought an optimistic vibe into the new year as it detailed final results from 2014.
The Minneapolis-based insurer's CEO, Stephen Hemsley, said Wednesday in a statement that the company enters 2015 "with a positive outlook and rising business momentum." That's a contrast to how UnitedHealth started 2014, filled with worry about another round of funding cuts to a key business: Medicare Advantage plans, the privately run versions of the federal government's coverage program for people who are over 65 or disabled.
Wednesday's proclamation garnered strong early reviews from investors, who pushed the stock price higher before markets opened. Most investors have turned their focus to what lies ahead by the time companies report their fourth-quarter results.
UnitedHealth had said early last month that it expected double-digit earnings growth in 2015 and a smaller hit from the health care overhaul, the massive federal law that expands coverage to millions of uninsured people. The law also levies taxes and fees on insurers. UnitedHealth said Wednesday that the Affordable Care Act cut 2014 earnings by $1 billion, or about $1 per share.
UnitedHealth also said last month that it expects 2015 earnings to range from $6 to $6.25 per share, and it reaffirmed that forecast Wednesday.
In the fourth quarter, the insurer earned $1.51 billion, or $1.55 per share. That compares to net income of $1.43 billion, or $1.41 per share, the previous year.
Total revenue rose more than 7 percent to $33.43 billion.
Analysts forecast, on average, earnings of $1.50 per share on $33.09 billion in revenue.
The insurer's stock climbed 1.7 percent, or $1.78, to $107.40 Wednesday in premarket trading. That advance follows a year in which UnitedHealth shares rose 34 percent, which tripled the advance of the Standard & Poor's 500 index, and set several all-time highs in the process.
UnitedHealth Group Inc. is the first health insurer to report earnings each quarter, and many analysts and investors see it as a bellwether for the sector.