UnitedHealth beats first-quarter profit view, raises 2019 forecast

(Reuters) - UnitedHealth Group Inc on Tuesday reported a quarterly profit above estimates and raised its 2019 earnings forecast on increased prescription volumes at its pharmacy benefits unit, sending shares of the largest U.S. health insurer up 3 percent.

Reuters April 17, 2019 00:05:33 IST
UnitedHealth beats first-quarter profit view, raises 2019 forecast

UnitedHealth beats firstquarter profit view raises 2019 forecast

(Reuters) - UnitedHealth Group Inc on Tuesday reported a quarterly profit above estimates and raised its 2019 earnings forecast on increased prescription volumes at its pharmacy benefits unit, sending shares of the largest U.S. health insurer up 3 percent.

The results eased some pressure on the health insurance sector where stocks have taken a beating in the past few weeks over policy-related uncertainty. Shares of rivals Anthem Inc, Centene Corp, Humana Inc and Cigna Corp were also up in light trading.

The uncertainty has largely resulted from proposals to change the drug-rebate system under which drugmakers refund money to insurers and pharmacy benefit managers.

Analysts said the industry bellwether's quarterly results reinforce that underlying fundamentals for the sector remain fully on track, despite the recent slump in share prices.

Optum, UnitedHealth's fastest-growing unit which houses its pharmacy benefits business, brought in sales of $26.36 billion in the quarter, a jump of nearly 12 percent from a year earlier due to higher prescription volumes.

UnitedHealth on Tuesday also raised its full-year adjusted earnings forecast to between $14.50 and $14.75 per share from its prior view of $14.40 to $14.70.

"We find this notable, as UnitedHealth has historically been conservative in adjusting guidance early in the year," Cantor Fitzgerald analyst Steven Halper said.

Last year, rivals Cigna Corp and Aetna combined with Optum's two largest rivals, Express Scripts Holding and CVS Health Corp.

In its health insurance business, UnitedHealth's medical care ratio, which compares premiums with the cost of delivering medical care, worsened to 82 percent, from 81.4 percent last year, on deferral of the health insurance tax, the company said. Analysts on average were expecting 82.2 percent.

In the quarter ended March 31, net earnings rose 22.2 percent to $3.47 billion, or $3.56 per share.

The company reported adjusted earnings of $3.73 per share, beating estimates of $3.60 per share, according to IBES data from Refinitiv.

Total revenue rose 9.3 percent to $60.31 billion, ahead of estimates of $59.71 billion.

Evercore ISI analyst Michael Newshel said UnitedHealth continues to deliver consistent performance and fundamentals still look good.

"But now the question is whether any rebound in the shares can be sustained amid the political overhang that has plagued the managed care group."

UnitedHealth's shares were up 2.66 percent at $236.32 in pre-market trading. As of Monday's close, the stock is down nearly 8 percent in 2019.

(Reporting by Tamara Mathias and Manojna Maddipatla in Bengaluru; Editing by Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.