UnitedHealth Q2 Profit Down, Yet Tops View; Lifts FY Outlook

(RTTNews) - Health insurer UnitedHealth Group Inc. (UNH) Thursday reported a marginal decline in second-quarter profit, while results topped analysts expectations on growth in membership. Revenues were up 7 percent from last year.

The company also raised its outlook for full-year 2014, citing strong second-quarter results and improving business trends.

For the second quarter, net earnings attributable to shareholders slightly declined to $1.41 billion from $1.44 billion in the previous year. However, earnings per share improved to $1.42 from $1.40 per share a year ago.

On average, 22 analysts polled by Thomson Reuters expected the company to report profit per share of $1.26 for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 7 percent to $32.57 billion from $30.41 billion in the preceding year. Analysts expected revenue of $32 billion for the quarter. Revenues from Premiums were $28.84 billion, higher than $27.22 billion a year ago.

The company said the revenue growth was led by growth in people served in public and senior markets at UnitedHealthcare and strong pharmacy services growth at Optum.

Optum revenues climbed 28 percent to $11.7 billion. Optum is a health services business serving the broad health care marketplace. UnitedHealthcare's second quarter revenues were $30.1 billion, an increase of 6 percent from last year.

Total UnitedHealthcare - Medical served 44,935 people, an increase of 270,000 from the previous quarter ended March 31, 2014. The company noted that consolidated medical care ratio increased 10 basis points year-over-year to 81.6 percent in the quarter.

For full-year 2014, the firm now expects net earnings to be in the range of $5.50 to $5.60 per share, compared to prior guidance of $5.40 to $5.60 per share.

Revenues are anticipated to be in the area of $130 billion, up from the previous estimate of $128 billion to $129 billion. Analysts expect the company to report fiscal 2014 profit per share of $5.52, on revenue of $128.66 billion.

UNH closed Wednesday's regular trading at $83.76 on the NYSE. In the pre-market activity on Thursday, the shares rose 0.64 percent.