Back to top

Image: Bigstock

UnitedHealth (UNH) Beats on Q3 Earnings, Guides Higher

Read MoreHide Full Article

Have you been eager to see how UnitedHealth Group Inc. (UNH - Free Report) performed in Q3 in comparison with the market expectations? Let’s quickly scan through the key facts from this Minnesota-based health insurer’s earnings release this morning:

An Earnings Beat

UnitedHealth came out with earnings per share of $2.66, beating the Zacks Consensus Estimate of $2.57. Results were aided by higher revenues from both its segments – UnitedHealthcare and Optum.

How Was the Estimate Revision Trend?

You should note that the earnings estimate for UnitedHealth depicted optimism prior to the earnings release. The Zacks Consensus Estimate increased marginally over the last 30 days.

Also, UnitedHealth has a decent earnings surprise history. Before posting earnings beat in Q3, the company delivered positive surprises in all the trailing four quarters. Overall, the company surpassed the Zacks Consensus Estimate by an average of 4.6% in the trailing four quarters.

Revenue Came In-line with the Expectation

UnitedHealth posted revenues of $50.3 billion, increasing 8.7% year over year. The reported figure was in line with the Zacks Consensus Estimate.

Key Stats for Q3:

Consolidated medical care ratio of 81.4% increased 110 basis points year-over-year.

Operating cost ratio of 14.7% was  down 50 basis points year-over-year.

The company medical enrollment grew to 49 million from 48.1 million in the year ago quarter.

Guidance Update

The company now expects 2017 GAAP net earnings to approach $9.45 per share and adjusted net earnings to approach $10.00 per share.

What Zacks Rank Says

The estimate revisions that we discussed earlier have driven a Zacks Rank #3 (Hold) for UnitedHealth. However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While on the surface things look favorable, it all depends on what sense the just-released report makes to the analysts. (You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.)

How the Market Reacted So Far    

Following the earnings release, UnitedHealth shares were up nearly 0.4% in the pre-trading session. This is in line with what the stock witnessed in the prior-day’s session. Clearly, the initial reaction shows that the investors have taken the results in their favor.  The full-session’s price movement will provide a clear picture.

Check back later for our full write up on this UnitedHealth earnings report!

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>


 


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


UnitedHealth Group Incorporated (UNH) - free report >>

Published in