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Analysis

UnitedHealth Delivers Strong Q4 Earnings to End 2018

By Jack O'Brien  
   January 15, 2019

UnitedHealth Group rounded out a strong 2018 with 12% year-over-year revenue growth in Q4 2018, thanks to Optum's record-breaking performance.

UnitedHealth Group ended Q4 2018 with $58.4 billion in total revenues, an increase of 12% year-over-year, totalling $226 billion in annual revenues, according to its fourth-quarter earnings report released Tuesday morning.

The Minnetonka-based insurer's earnings from operations for the quarter reached $4.5 billion, up from $4 billion in Q4 2017, and finished the year 14% higher than at the end of 2017. Adjusted net earnings for Q4 2018 grew by 27% to $3.28 per share, while annual adjusted net earnings grew by 28% to $12.88, which the company said was in line with its most recent outlook announced at its annual investor conference in November.

After a successful 2018, the insurer also projected annual revenues north of $240 billion for 2019

C-suite perspective:

"The 300,000 dedicated women and men of UnitedHealth Group are positively impacting society by restlessly pursuing a mission to help people live healthier lives and to improve health system performance. Their efforts led to accelerating growth across our enterprise in 2018 and created strong momentum for 2019," David Wichmann, CEO of UnitedHealth Group, said in a statement.

Related: UnitedHealth Posts Strong Q3 Earnings, Boosts Outlook

Related: UnitedHealth Sees Earnings Increase 13% in Q2

A larger driver of the solid financials for UnitedHealth was its subsidiary Optum, which recorded year-end revenues above $100 billion for the first time. 

"UnitedHealth Group (A3 stable) reported strong fourth quarter earnings, reflecting consistent results at UnitedHealthCare and strong growth and margin expansion at Optum, the health services subsidiary," Dean Ungar, vice president of Moody's Investors Service, said in a statement Tuesday. "UnitedHealth Group, through Optum, continues to demonstrate the promise of vertical integration as a way to diversify revenues and, ultimately, to lower the cost of healthcare."

The insurer's full-year cash flows from operations reached $15.7 billion, while projecting a range of cash flows between $17.3 billion and $17.8 billion in 2019. 

This also marks the first earnings report for UnitedHealth since it reduced its purchase price for DaVita Inc.'s medical group by more than $500 million, due to "underlying business performance." 

ADDITIONAL UNITEDHEALTH Q3 EARNINGS REPORT HIGHLIGHTS:

  • As it had done in its Q3 earnings report, UnitedHealth raised its outlook for net earnings per share to a range of $13.70 to $14 per share.
  • UnitedHealthcare served 2.4 million more consumers in 2018.
  • Optum also saw its full-year earnings from operations grow by $1.5 billion, a 22.6% year-over-year increase to $8.2 billion.

For complete financial information, review UnitedHealth's filing with the Securities and Exchange Commission.

Editor's note: This story has been updated to include a comment from Moody's.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

Photo credit: Editorial credit: Ken Wolter / Shutterstock.com / MINNETONKA, MN/USA - August 13, 2015: UnitedHealth Group headquarters building. HealthPartners is an integrated, nonprofit health care provider. - Image


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