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UnitedHealth Group Incorporated (UNH - Free Report) reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line improved 3.4% year over year owing to growing revenues.
UNH also gained from its long-term strategy along with diversified growth across Optum and UnitedHealthcare.
Revenues of the healthcare provider were $80.1 billion, which climbed 14.2% year over year. The upside was driven by revenue growth at both the business units, namely UnitedHealthcare and Optum. The top line beat the Zacks Consensus Estimate by 1.9%.
UNH’s medical care ratio of 82% expanded 110 basis points (bps) year over year, primarily due to the adverse effects of the pandemic and business mix.
Operating cost ratio of 14.2% contracted 40 bps year over year in the first quarter, courtesy of COVID effects and continued productivity advances. The metric is partly offset by business mix and investments undertaken.
Total operating costs for the first quarter escalated 15.4% year over year to $73.2 billion due to increased medical and operating costs, higher cost of products sold, and a rise in depreciation and amortization.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
In the reported quarter, UNH’s health benefits segment UnitedHealthcare generated revenues of $62.6 billion. Year-over-year revenue growth of 13.6% was driven by an increased number of people served.
Earnings from operations declined 7.3% year over year to $3.8 billion. The decrease was due to solid growth in membership and revenues along with medical and operating cost management.
Revenues from another segment Optum improved 18.9% year over year to $43.3 billion on the back of solid contributions from the sub-segments.
First-quarter revenues grew 18.9% to $43.3 billion while operating earnings grew 19.8% to $3.2 billion.
Earnings from operations of $3.2 billion advanced 23.1% year over year in the first quarter.
OptumHealth continued to perform well, courtesy of higher number of people being catered to in value-based care arrangements. While OptumInsight revenues were derived from growth in comprehensive managed services.
Optum Rx gained from advancements in new, large health plan clients and expansion of community-behavioral, specialty pharmacy and e-commerce services.
Increase in Membership Enrollment
UnitedHealth served 50.96 million people in the quarter, up 1.49 million lives year over year owing to a rise in member enrollment.
Financial Position
UNH exited the first quarter with cash and short-term investments of $28.4 billion, up 18.8% from the 2021-end level.
As of Mar 31, 2021, long-term debt less current maturities of $40.79 billion decreased 3.7% from the level at 2021 end.
Return on equity was 27.8% in the quarter.
Decline in Cash Flows
For the three months ended Mar 31, 2022, cash flows from operations totaled $5.3 billion but declined 11.4% from the year-ago comparable period’s level.
Share Repurchase and Dividend Update
In the reported quarter, UnitedHealth rewarded its shareholders with dividends worth $3.9 billion.
2022 Guidance Hiked
Concurrent with first-quarter results, UNH revised its earnings outlook for 2022.
Net earnings per share are now expected to be $20.80, higher than the prior guidance of $20.30.
Adjusted earnings are projected in the range of $21.20-$21.70 per share.
Here are some companies worth considering from the healthcare sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
Acadia Healthcare Company, Inc. (ACHC - Free Report) has an Earnings ESP of +0.95% and a Zacks Rank of 3 at present. ACHC will report Q1 results on May 5, 2022. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Brookdale Senior Living Inc. (BKD - Free Report) has an Earnings ESP of +8.76% and a Zacks Rank of 3, currently. BKD will report Q1 results on May 5.
Tenet Healthcare Corporation (THC - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #3 (Hold), currently. THC will release Q1 results on Apr 20, 2022.
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UnitedHealth's (UNH) Q1 Earnings Surpass Mark, Improve Y/Y
UnitedHealth Group Incorporated (UNH - Free Report) reported first-quarter 2022 earnings of $5.49 per share, which outpaced the Zacks Consensus Estimate by 1.7%. The bottom line improved 3.4% year over year owing to growing revenues.
UNH also gained from its long-term strategy along with diversified growth across Optum and UnitedHealthcare.
Revenues of the healthcare provider were $80.1 billion, which climbed 14.2% year over year. The upside was driven by revenue growth at both the business units, namely UnitedHealthcare and Optum. The top line beat the Zacks Consensus Estimate by 1.9%.
UNH’s medical care ratio of 82% expanded 110 basis points (bps) year over year, primarily due to the adverse effects of the pandemic and business mix.
Operating cost ratio of 14.2% contracted 40 bps year over year in the first quarter, courtesy of COVID effects and continued productivity advances. The metric is partly offset by business mix and investments undertaken.
Total operating costs for the first quarter escalated 15.4% year over year to $73.2 billion due to increased medical and operating costs, higher cost of products sold, and a rise in depreciation and amortization.
UnitedHealth Group Incorporated Price, Consensus and EPS Surprise
UnitedHealth Group Incorporated price-consensus-eps-surprise-chart | UnitedHealth Group Incorporated Quote
Segmental Performances
In the reported quarter, UNH’s health benefits segment UnitedHealthcare generated revenues of $62.6 billion. Year-over-year revenue growth of 13.6% was driven by an increased number of people served.
Earnings from operations declined 7.3% year over year to $3.8 billion. The decrease was due to solid growth in membership and revenues along with medical and operating cost management.
Revenues from another segment Optum improved 18.9% year over year to $43.3 billion on the back of solid contributions from the sub-segments.
First-quarter revenues grew 18.9% to $43.3 billion while operating earnings grew 19.8% to $3.2 billion.
Earnings from operations of $3.2 billion advanced 23.1% year over year in the first quarter.
OptumHealth continued to perform well, courtesy of higher number of people being catered to in value-based care arrangements. While OptumInsight revenues were derived from growth in comprehensive managed services.
Optum Rx gained from advancements in new, large health plan clients and expansion of community-behavioral, specialty pharmacy and e-commerce services.
Increase in Membership Enrollment
UnitedHealth served 50.96 million people in the quarter, up 1.49 million lives year over year owing to a rise in member enrollment.
Financial Position
UNH exited the first quarter with cash and short-term investments of $28.4 billion, up 18.8% from the 2021-end level.
As of Mar 31, 2021, long-term debt less current maturities of $40.79 billion decreased 3.7% from the level at 2021 end.
Return on equity was 27.8% in the quarter.
Decline in Cash Flows
For the three months ended Mar 31, 2022, cash flows from operations totaled $5.3 billion but declined 11.4% from the year-ago comparable period’s level.
Share Repurchase and Dividend Update
In the reported quarter, UnitedHealth rewarded its shareholders with dividends worth $3.9 billion.
2022 Guidance Hiked
Concurrent with first-quarter results, UNH revised its earnings outlook for 2022.
Net earnings per share are now expected to be $20.80, higher than the prior guidance of $20.30.
Adjusted earnings are projected in the range of $21.20-$21.70 per share.
Zacks Rank
UnitedHealth Group currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Here are some companies worth considering from the healthcare sector as our model shows that these have the right combination of elements to beat on earnings this reporting cycle:
Acadia Healthcare Company, Inc. (ACHC - Free Report) has an Earnings ESP of +0.95% and a Zacks Rank of 3 at present. ACHC will report Q1 results on May 5, 2022. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Brookdale Senior Living Inc. (BKD - Free Report) has an Earnings ESP of +8.76% and a Zacks Rank of 3, currently. BKD will report Q1 results on May 5.
Tenet Healthcare Corporation (THC - Free Report) has an Earnings ESP of +2.06% and a Zacks Rank #3 (Hold), currently. THC will release Q1 results on Apr 20, 2022.