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Representatives chat with customers at a UnitedHealthcare store in Queens, New York.
Michael Nagel | bloomberg | Getty Images
United Health GroupThe share price jumped on Friday after the healthcare group reported Second quarter revenue and adjusted earnings That beat Wall Street expectations despite the high costs of treatment.
The results eased investor concerns after the Minnesota-based company reported an increase in demand for non-urgent surgeries and outpatient services last month and spooked the market.
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UnitedHealth Group is the largest healthcare company in the United States by market capitalization and revenue, and is larger than the largest banks in the country. Because of its size, UnitedHealth Group is a leader in the broader health insurance sector. Its market capitalization was about $447 billion as of Friday afternoon.
Here’s what UnitedHealth is all about mentioned Compared to Wall Street expectations, based on a survey of analysts by Refinitiv:
- Earnings per share: $6.14 adjusted vs. $5.99 expected
- he won: 92.9 billion dollars, compared to the expected 91.01 billion dollars
UnitedHealth Group reported net income of $5.47 billion, or $5.82 per share, for the quarter. to compare with $5.07 billion, or $5.34 per share, for the same period last year. Excluding certain items, the company’s adjusted earnings per share was $6.14 for the period.
The company reported total revenue of $92.9 billion for the quarter, up 16% from the same period last year. That excludes $33.6 billion in “deletions,” which are payments from the company’s UnitedHealthcare business to its other Optum division. UnitedHealth Group cannot record these transactions as revenue because they are self-paying.
UnitedHealthcare, which provides insurance coverage and benefits services to more than 50 million people, saw second-quarter revenue grow 13% from a year ago to $70.2 billion.
The company’s other platform, Optum, saw revenue increase nearly 25% from a year ago to $56.3 billion, helped in part by UnitedHealth Group’s $8 billion acquisition of healthcare technology company Change Healthcare.
Optum provides health services and operates one of the largest pharmacy benefit managers, or brokers, who negotiate drug discounts with drug manufacturers on behalf of health insurers and major employers.
UnitedHealth Group raised its bottom line adjusted earnings forecast for the full year to $24.70 to $25.00 per share, from a previous forecast of $24.50 to $25.00 per share.
The company’s medical cost ratio — the ratio of payments on claims compared to insurance premiums — was 83.2%. Analysts had estimated the rate would be 83.3% for the quarter, according to FactSet.
The medical cost percentage was up nearly 2% compared to the same period last year. UnitedHealth Care said that was driven by a previously observed rise in elective surgeries and outpatient care activity, especially among older adults.
Last month, UnitedHealth Group CFO John Rex said at a Goldman Sachs healthcare conference that the company reported “strong outpatient care activity” throughout April, May and early June.
Most of that care has come from Medicare enrollees undergoing outpatient heart, hip and knee replacement procedures, according to Ricks.
In recent years, insurance companies have benefited from delays in non-urgent procedures due to hospital staff shortages and the pandemic, which has overwhelmed hospitals with Covid patients. Hospitals at the time were widely seen as too risky to engage in elective procedures.
But executives at UnitedHealth Group indicated the trend may be reversing.
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