UnitedHealth Group Inc. (UNH - Free Report) reported second-quarter net operating earnings per share of $2.46, comfortably beating the Zacks Consensus Estimate of $2.38 and increasing 25.5% year over year.
Higher revenues, strength in both its segments – UnitedHealthcare and Optum – and membership growth prompted the outperformance.
UnitedHealth has a tradition of guiding conservatively and then beating its own estimates to surprise investors. The company has surpassed expectations in 25 out of 28 reported quarters and the trend continued in the quarter under review.
The stock gained 1.8% in the pre-market trading session and we expect continued outperformance to drive the stock higher.
Behind the Headlines
UnitedHealth posted net revenue of $50.1 billion, in line with the Zacks Consensus Estimate. Revenues were up 7.7% year over year.
The company reported medical care ratio of 82.2%, up 20 basis points year over year.
Operating cost ratio of 14.6% was flat year over year.
Segment Performance
In the reported quarter, UnitedHealth’s health benefits segment – UnitedHealthcare – reported revenues of $40.8 billion, up 8.6% year over year. Earnings from operations increased 13.9% year over year to $2.2 billion.
Revenues from Optum improved 9.9% year over year to $22.7 billion, reflecting strong contribution from the subsegments OptumHealth and OptumInsight as well as OptumRx. Earnings from operations surged 20.5% year over year to $1.5 billion. Continued focus on accelerating growth as well as improving margins and productivity through enhanced integration and business alignment led to the overall improvement of this segment.
Membership Enrollment
The company’s medical enrollment grew to 49.5 million from 48 million in the year-ago quarter.
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UnitedHealth Group Inc. (UNH - Free Report) reported second-quarter net operating earnings per share of $2.46, comfortably beating the Zacks Consensus Estimate of $2.38 and increasing 25.5% year over year.
Higher revenues, strength in both its segments – UnitedHealthcare and Optum – and membership growth prompted the outperformance.
UnitedHealth has a tradition of guiding conservatively and then beating its own estimates to surprise investors. The company has surpassed expectations in 25 out of 28 reported quarters and the trend continued in the quarter under review.
The stock gained 1.8% in the pre-market trading session and we expect continued outperformance to drive the stock higher.
Behind the Headlines
UnitedHealth posted net revenue of $50.1 billion, in line with the Zacks Consensus Estimate. Revenues were up 7.7% year over year.
The company reported medical care ratio of 82.2%, up 20 basis points year over year.
Operating cost ratio of 14.6% was flat year over year.
Segment Performance
In the reported quarter, UnitedHealth’s health benefits segment – UnitedHealthcare – reported revenues of $40.8 billion, up 8.6% year over year. Earnings from operations increased 13.9% year over year to $2.2 billion.
Revenues from Optum improved 9.9% year over year to $22.7 billion, reflecting strong contribution from the subsegments OptumHealth and OptumInsight as well as OptumRx. Earnings from operations surged 20.5% year over year to $1.5 billion. Continued focus on accelerating growth as well as improving margins and productivity through enhanced integration and business alignment led to the overall improvement of this segment.
Membership Enrollment
The company’s medical enrollment grew to 49.5 million from 48 million in the year-ago quarter.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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