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UnitedHealth (UNH) to Post Q1 Earnings: What You Should Expect
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UnitedHealth Group Incorporated (UNH - Free Report) is set to report its first-quarter 2023 results on Apr 14, before the opening bell.
This healthcare plan provider reported adjusted earnings of $5.34 per share for the last quarter, beating the Zacks Consensus Estimate by 3.3% on the back of sustained membership growth in its UnitedHealthcare business. Strong expansion in value-based arrangements at the Optum Health segment also contributed to the upside. However, the upside was partly offset by elevated operating costs.
The Zacks Consensus Estimate for first-quarter earnings per share of $6.25 suggests a 13.8% increase from the prior-year figure of $5.49 while our estimate of $6.17 indicates a 12.5% year-over-year increase. The consensus mark has remained stable over the past week.
The consensus estimate for first-quarter revenues of $89.4 billion indicates an 11.6% increase from the year-ago reported figure while our estimate suggests 10.9% year-over-year growth.
UnitedHealth beat the consensus estimate for earnings in all the prior four quarters, with the average being 4.4%. This is depicted in the graph below:
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth’s first-quarter results are expected to be supported by increased premiums, backed by strong membership growth. Our estimatefor revenues from premiums suggests a 10.5% year-over-year increase. Solid domestic commercial benefit insurance sales are likely to have aided premium growth.
While our estimate for product revenues indicates marginal year-over-year growth, the same for services revenues predicts around 30% year-over-year growth from the year-ago level of $6,372 million. Higher services revenues across the board are likely to have aided UNH’s top line in the first quarter.
Revenues from UnitedHealthcare, UNH’s largest segment that sells insurance, are likely to have risen on higher memberships in selected programs. As such, our estimate for segmental revenues signals a more than 9% year-over-year rise. Furthermore, investments and other income are likely to have witnessed a significant increase from the year-ago level.
The Optum business segment is expected to have witnessed a higher contribution from the sub-segments, especially in OptumHealth and Optum Insight, in the first 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 the addition of Change Healthcare, growth in services and technology offerings, as well as improved productivity. Our estimate for operating income from the Optum business segment suggests a 34.7% year-over-year increase. This is expected to have positioned the company for 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% and 13.5% year-over-year increases, respectively. This is likely to have affected its profit levels in the first 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 -1.20%. This is because the Most Accurate Estimate currently stands at $6.17 per share, lower than the Zacks Consensus Estimate of $6.25.
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 #2.
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:
Bio-Rad Laboratories, Inc. (BIO - Free Report) has an Earnings ESP of +0.16% and is a Zacks #1 Ranked player.
The Zacks Consensus Estimate for Bio-Rad’s earnings per share for the to-be-reported quarter is pegged at $3.24, which remained stable over the past week. BIO beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 27.5%.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +2.96% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 85 cents per share, which witnessed one upward estimate revision in the past 30 days against none in the opposite direction. AZN beat earnings estimates in all of the past four quarters, the average surprise being 7.8%.
Amgen Inc. (AMGN - Free Report) has an Earnings ESP of +14.54% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Amgen’s bottom line for the to-be-reported quarter is pegged at $3.93 per share, which has remained stable over the past week. AMGN beat earnings estimates in all the past four quarters, the average being 3.4%.
Image: Bigstock
UnitedHealth (UNH) to Post Q1 Earnings: What You Should Expect
UnitedHealth Group Incorporated (UNH - Free Report) is set to report its first-quarter 2023 results on Apr 14, before the opening bell.
This healthcare plan provider reported adjusted earnings of $5.34 per share for the last quarter, beating the Zacks Consensus Estimate by 3.3% on the back of sustained membership growth in its UnitedHealthcare business. Strong expansion in value-based arrangements at the Optum Health segment also contributed to the upside. However, the upside was partly offset by elevated operating costs.
Let’s see how things have shaped up before the first-quarter earnings announcement.
Where Do the Estimates Stand?
The Zacks Consensus Estimate for first-quarter earnings per share of $6.25 suggests a 13.8% increase from the prior-year figure of $5.49 while our estimate of $6.17 indicates a 12.5% year-over-year increase. The consensus mark has remained stable over the past week.
The consensus estimate for first-quarter revenues of $89.4 billion indicates an 11.6% increase from the year-ago reported figure while our estimate suggests 10.9% year-over-year growth.
UnitedHealth beat the consensus estimate for earnings in all the prior four quarters, with the average being 4.4%. 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 first-quarter results are expected to be supported by increased premiums, backed by strong membership growth. Our estimatefor revenues from premiums suggests a 10.5% year-over-year increase. Solid domestic commercial benefit insurance sales are likely to have aided premium growth.
While our estimate for product revenues indicates marginal year-over-year growth, the same for services revenues predicts around 30% year-over-year growth from the year-ago level of $6,372 million. Higher services revenues across the board are likely to have aided UNH’s top line in the first quarter.
Revenues from UnitedHealthcare, UNH’s largest segment that sells insurance, are likely to have risen on higher memberships in selected programs. As such, our estimate for segmental revenues signals a more than 9% year-over-year rise. Furthermore, investments and other income are likely to have witnessed a significant increase from the year-ago level.
The Optum business segment is expected to have witnessed a higher contribution from the sub-segments, especially in OptumHealth and Optum Insight, in the first 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 the addition of Change Healthcare, growth in services and technology offerings, as well as improved productivity. Our estimate for operating income from the Optum business segment suggests a 34.7% year-over-year increase. This is expected to have positioned the company for 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% and 13.5% year-over-year increases, respectively. This is likely to have affected its profit levels in the first 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 -1.20%. This is because the Most Accurate Estimate currently stands at $6.17 per share, lower than the Zacks Consensus Estimate of $6.25.
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 #2.
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:
Bio-Rad Laboratories, Inc. (BIO - Free Report) has an Earnings ESP of +0.16% and is a Zacks #1 Ranked player.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Bio-Rad’s earnings per share for the to-be-reported quarter is pegged at $3.24, which remained stable over the past week. BIO beat earnings estimates thrice in the past four quarters and missed once, the average surprise being 27.5%.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +2.96% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 85 cents per share, which witnessed one upward estimate revision in the past 30 days against none in the opposite direction. AZN beat earnings estimates in all of the past four quarters, the average surprise being 7.8%.
Amgen Inc. (AMGN - Free Report) has an Earnings ESP of +14.54% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Amgen’s bottom line for the to-be-reported quarter is pegged at $3.93 per share, which has remained stable over the past week. AMGN beat earnings estimates in all the past four quarters, the average being 3.4%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.