UnitedHealth group Inc. (UNH – Analyst Report), the bellwether of health insurance companies, has a strong presence in the sector and is among the top five companies in the industry. This Minneapolis-based company is well known for its diversified business profile providing an array of well-being services to people through all stages of life.
UnitedHealth stands apart from its peers as it has focused on growing the less regulated business that is the health services segment named as Optum. This health service segment is like a jewel in the crown for the company and is expected to make increasing contribution to the group's overall revenues going forward. The company's recent acquisition of Catamaran will beef up its pharmacy benefits business, OptumRx.
Despite some misgivings brought along with the health care reform act, UnitedHealth has been a net gainer from the heath care reform regulation. The company is expanding its presence on online exchanges, aggressively forming Accountable Care Organizations and taking its business beyond national boundaries. These developments should bode well for the group's earnings.
UnitedHealth has a pretty good earnings track record with the company delivering positive earnings surprises in each of the last four quarters with an average surprise of 6%.
Currently, UnitedHealth has a Zacks Rank #2 (Buy). We have highlighted some of the key stats from this just-revealed announcement below:
Earnings Beat: UnitedHealth beat third quarter earnings by two cents per share. Our consensus called for EPS of $1.63 and the company reported EPS of $1.65
Revenues Beat: Revenues also came in ahead of expectations. UnitedHealth posted revenues of $41.5 billion, compared to our consensus estimate of $39.9 billion and grew 26.5% year over year.
Key Stats: The company reported third quarter medical care ratio of 80.6% up 90 basis points year-over-year.
Revenues from the company's health care segment came in at $32.8 billion up 9% year over year while the other segment – Optum posted revenue of $19.3 billion up 61% year over year.
The company's Medical membership increased to 46.1 million up from 45.9 million in the last year quarter.
