We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Will UnitedHealth (UNH) Continue to Beat on Earnings in Q2?
Read MoreHide Full Article
Health insurer UnitedHealth Group Inc. (UNH - Free Report) is scheduled to report second-quarter results before the opening bell on Jul 19. The company is considered the bellwether of the managed care sector since it is the first to report earnings every quarter.
Last quarter, this health insurer delivered a 5.23% positive earnings surprise. The average beat for the trailing four quarters is 3.12%. Will UnitedHealth deliver a positive earnings surprise this quarter as well?
UnitedHealth 2Q16 Flashback
We expect the bottom line to benefit from a decline in operating cost ratio due to the combination of business mix and technology-driven operational efficiencies. These efficiency gains will be partially offset by continued investments in businesses.
UnitedHealth’s health services segment branded as Optum has been seeing improving revenues for the past several quarters and the trend will be seen this quarter too. Within Optum, revenues from the subsegment Optum Rx are expected to outpace revenue growth at the other two segments OptumHealth and OptumInsight. Revenues at Optum Rx are likely to be driven by the synergistic effect of the Catamaran acquisition.
Strong enrollment growth across diversified business segments is expected to give the company’s earnings a boost in the second quarter.
Earnings will also see an upside from share buyback and a slightly lower tax rate compared with the first quarter.
Our proven model does not conclusively show that UnitedHealth will likely beat the Zacks Consensus Estimate in the second quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: UnitedHealth's Most Accurate estimate is pegged at $1.89 per share, which is in line with the Zacks Consensus Estimate. The Earnings ESP is thus 0.00%.
Zacks Rank: UnitedHealth has a Zacks Rank #3. Though this increases the predictive power of ESP, the company's ESP of 0.00% makes our surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Centene Corp. (CNC - Free Report) has an Earnings ESP of +6.54% and carries a Zacks Rank #2. The company is slated to report second-quarter earnings results on Jul 26.
Aflac Incorporated. (AFL - Free Report) has an Earnings ESP of +2.4% and carries a Zacks Rank #3. The company is expected to report second-quarter earnings results on Jul 28.
Gilead Sciences Inc. (GILD - Free Report) has an Earnings ESP of +6.91% and carries a Zacks Rank #2. The company is expected to report second-quarter earnings results on Jul 25.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Will UnitedHealth (UNH) Continue to Beat on Earnings in Q2?
Health insurer UnitedHealth Group Inc. (UNH - Free Report) is scheduled to report second-quarter results before the opening bell on Jul 19. The company is considered the bellwether of the managed care sector since it is the first to report earnings every quarter.
Last quarter, this health insurer delivered a 5.23% positive earnings surprise. The average beat for the trailing four quarters is 3.12%. Will UnitedHealth deliver a positive earnings surprise this quarter as well?
UnitedHealth 2Q16 Flashback
We expect the bottom line to benefit from a decline in operating cost ratio due to the combination of business mix and technology-driven operational efficiencies. These efficiency gains will be partially offset by continued investments in businesses.
UnitedHealth’s health services segment branded as Optum has been seeing improving revenues for the past several quarters and the trend will be seen this quarter too. Within Optum, revenues from the subsegment Optum Rx are expected to outpace revenue growth at the other two segments OptumHealth and OptumInsight. Revenues at Optum Rx are likely to be driven by the synergistic effect of the Catamaran acquisition.
Strong enrollment growth across diversified business segments is expected to give the company’s earnings a boost in the second quarter.
Earnings will also see an upside from share buyback and a slightly lower tax rate compared with the first quarter.
UNITEDHEALTH GP Price and EPS Surprise
UNITEDHEALTH GP Price and EPS Surprise | UNITEDHEALTH GP Quote
Earnings Whispers
Our proven model does not conclusively show that UnitedHealth will likely beat the Zacks Consensus Estimate in the second quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy) or at least 2 (Buy) or 3 (Hold) for this to happen. But this is not the case here as elaborated below.
Zacks ESP: UnitedHealth's Most Accurate estimate is pegged at $1.89 per share, which is in line with the Zacks Consensus Estimate. The Earnings ESP is thus 0.00%.
Zacks Rank: UnitedHealth has a Zacks Rank #3. Though this increases the predictive power of ESP, the company's ESP of 0.00% makes our surprise prediction difficult.
Stocks to Consider
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Centene Corp. (CNC - Free Report) has an Earnings ESP of +6.54% and carries a Zacks Rank #2. The company is slated to report second-quarter earnings results on Jul 26.
Aflac Incorporated. (AFL - Free Report) has an Earnings ESP of +2.4% and carries a Zacks Rank #3. The company is expected to report second-quarter earnings results on Jul 28.
Gilead Sciences Inc. (GILD - Free Report) has an Earnings ESP of +6.91% and carries a Zacks Rank #2. The company is expected to report second-quarter earnings results on Jul 25.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>