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Analysis

UnitedHealth Sees Earnings Increase 13% in Q2

By Jack O'Brien  
   July 17, 2018

The insurer saw solid year-over-year growth in a variety of aspects, leading the company to raise its outlook for net earnings to end the year. 

UnitedHealth Group posted $4.2 billion earnings from operations, an increase of 13% year-over-year, according to its second-quarter earnings report released Tuesday.

The results marked another strong quarter for the insurer, which saw its earnings from operations grow from $3.7 billion during Q2 2017, and even increase from $4.1 billion in Q1 2018. Compared to this time last year, UnitedHealth increased its overall revenues by $6 billion, improving its net margin to 5.2%.

"Today, UnitedHealth Group delivers increasing value to more people, driven by strong execution, consistently high quality, deep relationships and our distinctive combination of clinical, technology and information capabilities. As we look ahead, we will drive our growth on the strength of practical innovations that anticipate and respond to increasing consumer expectations and clear social needs," UnitedHealth Group CEO David Wichmann said in a statement.

UnitedHealth's consistent, improved performance comes as insurers brace for the widespread introduction of association health plans and short-term health plans. The health plan juggernaut is so enthused by its first-half financial performance that it raised its outlook for end-of-year adjusted earnings to $12.50 to $12.75 per share. After Q1, UnitedHealth projected a range of adjusted net earnings per share from $12.40 to $12.65. Meanwhile, GAAP diluted earnings ranged between $11.80 to $12.05 per share. 

Related: UnitedHealth Ups Earnings Outlook on Healthy Q1 Report

Moody's Vice President Dean Ungar said in a statement Tuesday that UnitedHealth's leverage remains high and will increase slightly after the company finalizes its acquisition of DaVita Medical Group.

"But the pharmacy benefits manager and analytics business were also solid," Unger said. "UnitedHealth’s scale, diversity and consistent and disciplined growth continue to support our A3 long-term issuer rating."

Below are some additional highlights from UnitedHealth's Q2 earnings report:

  • UnitedHealth posted cash flows from operations totalling $4 billion.

  • The insurer's adjusted net earnings per share also grew 27.6%.

  • UnitedHealthcare added 2.2 million more consumers year-over-year.

  • Optum's earnings from operations grew by 21.5% year-over-year to $1.8 billion.

Additional information is available in 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.


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