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UnitedHealth (UNH) to Post Q4 Earnings: What You Should Know
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UnitedHealth Group Incorporated (UNH - Free Report) is set to report its fourth-quarter 2022 results on Jan 13, before the opening bell.
The healthcare plan provider reported adjusted earnings of $5.79 per share for the last quarter, beating the Zacks Consensus Estimate by 6.2% on the back of sustained membership growth in its UnitedHealthcare business. Strong expansion in value-based arrangements at the Optum Health segment contributed to the upside. However, the positives were partly offset by elevated operating costs.
The Zacks Consensus Estimate for fourth-quarter earnings per share of $5.17 suggests a 15.4% increase from the prior-year figure of $4.48 while our estimate indicates a 14.4% year-over-year increase. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $82.8 billion indicates a 12.3% increase from the year-ago reported figure while our estimate suggests 12.6% year-over-year growth.
UnitedHealth beat the consensus estimate for earnings in each of the prior four quarters, with the average being 4.6%. This is depicted in the graph below:
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth’s fourth-quarter results are expected to be boosted by higher premiums. The Zacks Consensus Estimate for revenues from premiums is pegged at $64,332 million, indicating an increase from $57,547 million a year ago while our estimate suggests a 12.8% year-over-year increase. Solid domestic commercial benefit insurance sales are likely to have aided premium growth.
The consensus mark for product revenues is pegged at $9,579 million, signaling a jump from $8,961 million a year ago while our estimate suggests 5.9% year-over-year growth. The Zacks Consensus Estimate for services is pegged at $7,672 million, indicating an increase from the year-ago figure of $6,422 million while our estimate suggests a 21.8% year-over-year jump.
Revenues from UnitedHealthcare, UNH’s largest segment that sells insurance, are likely to have risen on higher membership in the Community & State programs. As such, the consensus mark for UnitedHealthcare revenues indicates 10.3% growth from the year-ago period while our estimate signals a 10.9% year-over-year rise.
The Optum business segment is expected to have witnessed a higher contribution from the sub-segments, OptumHealth and Optum Insight, in the fourth quarter. A rise in the number of people being catered to in value-based care arrangements and the growing strength of affiliated physicians is likely to aid the results. Optum Insight is likely to have witnessed higher profits, owing to growth in services and technology offerings and improved productivity.
The Zacks Consensus Estimate for operating income from the Optum business segment is pegged at $3,901 million, signaling a 14.1% jump from $3,420 million in the prior-year quarter while our estimate suggests an 11.4% year-over-year increase. This is expected to have led to a year-over-year rise in the bottom line.
However, UnitedHealth is likely to have faced an elevated expense level due to a rise in medical and operating costs. Higher costs of products sold are likely to have reduced its margins. Our estimates for medical and operating costs indicate 11.6% and 11.1% year-over-year increases, respectively. This is likely to have affected its profit levels in the fourth quarter, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -0.79%. This is because the Most Accurate Estimate currently stands at $5.13 per share, lower than the Zacks Consensus Estimate of $5.17.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: UnitedHealth currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for UnitedHealth, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Adicet Bio, Inc. (ACET - Free Report) has an Earnings ESP of +4.27% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Adicet’s earnings per share for the to-be-reported quarter has improved 4.8% in the past 60 days. ACET witnessed three upward estimate revisions during this time against none in the opposite direction.
Affimed N.V. (AFMD - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #3.
The Zacks Consensus Estimate for Affimed’s bottom line for the to-be-reported quarter indicates a 4.6% improvement from the year-ago period. AFMD beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 11.5%.
Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.42% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Masimo’s bottom line for the to-be-reported quarter is pegged at $1.18 per share, which improved 4.4% in the past 30 days. MASI beat earnings estimates in all the past four quarters, the average being 8.3%.
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UnitedHealth (UNH) to Post Q4 Earnings: What You Should Know
UnitedHealth Group Incorporated (UNH - Free Report) is set to report its fourth-quarter 2022 results on Jan 13, before the opening bell.
The healthcare plan provider reported adjusted earnings of $5.79 per share for the last quarter, beating the Zacks Consensus Estimate by 6.2% on the back of sustained membership growth in its UnitedHealthcare business. Strong expansion in value-based arrangements at the Optum Health segment contributed to the upside. However, the positives were partly offset by elevated operating costs.
Let’s see how things have shaped up before the fourth-quarter earnings announcement.
What Do the Estimates Say?
The Zacks Consensus Estimate for fourth-quarter earnings per share of $5.17 suggests a 15.4% increase from the prior-year figure of $4.48 while our estimate indicates a 14.4% year-over-year increase. The consensus mark remained stable over the past week. The consensus estimate for fourth-quarter revenues of $82.8 billion indicates a 12.3% increase from the year-ago reported figure while our estimate suggests 12.6% year-over-year growth.
UnitedHealth beat the consensus estimate for earnings in each of the prior four quarters, with the average being 4.6%. This is depicted in the graph below:
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth Group Incorporated price-eps-surprise | UnitedHealth Group Incorporated Quote
Factors to Note
UnitedHealth’s fourth-quarter results are expected to be boosted by higher premiums. The Zacks Consensus Estimate for revenues from premiums is pegged at $64,332 million, indicating an increase from $57,547 million a year ago while our estimate suggests a 12.8% year-over-year increase. Solid domestic commercial benefit insurance sales are likely to have aided premium growth.
The consensus mark for product revenues is pegged at $9,579 million, signaling a jump from $8,961 million a year ago while our estimate suggests 5.9% year-over-year growth. The Zacks Consensus Estimate for services is pegged at $7,672 million, indicating an increase from the year-ago figure of $6,422 million while our estimate suggests a 21.8% year-over-year jump.
Revenues from UnitedHealthcare, UNH’s largest segment that sells insurance, are likely to have risen on higher membership in the Community & State programs. As such, the consensus mark for UnitedHealthcare revenues indicates 10.3% growth from the year-ago period while our estimate signals a 10.9% year-over-year rise.
The Optum business segment is expected to have witnessed a higher contribution from the sub-segments, OptumHealth and Optum Insight, in the fourth quarter. A rise in the number of people being catered to in value-based care arrangements and the growing strength of affiliated physicians is likely to aid the results. Optum Insight is likely to have witnessed higher profits, owing to growth in services and technology offerings and improved productivity.
The Zacks Consensus Estimate for operating income from the Optum business segment is pegged at $3,901 million, signaling a 14.1% jump from $3,420 million in the prior-year quarter while our estimate suggests an 11.4% year-over-year increase. This is expected to have led to a year-over-year rise in the bottom line.
However, UnitedHealth is likely to have faced an elevated expense level due to a rise in medical and operating costs. Higher costs of products sold are likely to have reduced its margins. Our estimates for medical and operating costs indicate 11.6% and 11.1% year-over-year increases, respectively. This is likely to have affected its profit levels in the fourth quarter, making an earnings beat uncertain.
Earnings Whispers
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. That is not the case here, as you will see below.
Earnings ESP: The company’s Earnings ESP is -0.79%. This is because the Most Accurate Estimate currently stands at $5.13 per share, lower than the Zacks Consensus Estimate of $5.17.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: UnitedHealth currently carries a Zacks Rank #3.
Stocks to Consider
While an earnings beat looks uncertain for UnitedHealth, here are some companies from the broader Medical space that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this time around:
Adicet Bio, Inc. (ACET - Free Report) has an Earnings ESP of +4.27% and is a Zacks #2 Ranked player.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Adicet’s earnings per share for the to-be-reported quarter has improved 4.8% in the past 60 days. ACET witnessed three upward estimate revisions during this time against none in the opposite direction.
Affimed N.V. (AFMD - Free Report) has an Earnings ESP of +4.76% and a Zacks Rank #3.
The Zacks Consensus Estimate for Affimed’s bottom line for the to-be-reported quarter indicates a 4.6% improvement from the year-ago period. AFMD beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 11.5%.
Masimo Corporation (MASI - Free Report) has an Earnings ESP of +0.42% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Masimo’s bottom line for the to-be-reported quarter is pegged at $1.18 per share, which improved 4.4% in the past 30 days. MASI beat earnings estimates in all the past four quarters, the average being 8.3%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.