UnitedHealth’s revenues are slightly above estimates. The stock is trading higher.

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The time of dreams



UnitedHealth Group

Fourth-quarter earnings beat Wall Street expectations, raising hopes for the earnings season for the health insurance industry, which has seen its stock price plummet in recent weeks.

UnitedHealth (ticker: UNH) reported fourth-quarter adjusted earnings of $4.48 per share, beating FactSet’s consensus estimate of $4.30. Revenue for the quarter was $73.7 billion, up from $65.5 billion in the same quarter of 2020, and better than analysts’ expectation of $73 billion.

UnitedHealth shares rose 0.9% in premarket trading. The stock fell 8.2% in January amid concerns about growth in the Medicare Advantage business. Shares of a number of health insurers, including UnitedHealth, fell in early January after


humane

(HUM) has significantly lowered its growth expectations for its Medicare Advantage business in 2022.

UnitedHealth reports earnings ahead of its peers, and Wednesday’s positive report could signal a sunnier earnings season for health insurers, though investors didn’t seem particularly enthusiastic early Wednesday.


centene

(CNC) rose 0.1% in premarket trading, while


Anthem

(ANTM) were stable.

The company did not update its guidance for 2022 on Wednesday. In late November, UnitedHealth said it expects revenue of between $317 billion and $320 billion in 2022 and adjusted earnings of between $21.10 and $21.60 per share.

UnitedHealth said Wednesday that the medical care ratio for its fourth quarter, which measures the percentage of insurance premiums paid to cover costs, was 83.7%, in line with analysts’ estimates. The medical care ratio for all of 2021 was 82.6%, compared to 79.1% in 2020.

The company said the medical care ratio for 2021 was higher than in 2020 due, in part, to higher Covid-19 costs.

The total number of people served by UnitedHealth’s insurance division, UnitedHealthcare, increased by 2.2 million people in 2021, the company said.

UnitedHealth shares are up 31.4% over the past 12 months. The stock is trading at 21.2 times expected earnings over the next 12 months, according to FactSet. Of the 28 analysts tracked by FactSet who cover UnitedHealth, 24 rate it as buy or overweight, while three rate it as hold and one rate it as underweight.

“Our strong performance in 2021 and our confident growth outlook for 2022 and beyond reflect the acceleration of innovation and the expansion of capabilities at Optum and UnitedHealthcare,” UnitedHealth CEO Andrew Witty said in a statement. a statement.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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