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Will UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q3 Earnings?
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UnitedHealth Group Incorporated (UNH - Free Report) is set to release its third-quarter 2023 results on Oct 13, before the opening bell. Given the company's substantial involvement in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance. Growth in Community & State as well as Employer & Individual Domestic is expected to have supported the unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits around the world. While it has significant exposure to the Medicare and Medicaid markets, it also serves individuals and employers. The defensive properties of the sector enable UnitedHealth to maintain its momentum despite economic headwinds.
In the last reported quarter, the segment’s revenues jumped 13.1% year over year to $70.2 billion, whereas operating income improved 13.2% to $4.4 billion.
UnitedHealthcare's Q2 Performance
Considering the unit’s products, premiums increased 12.9% year over year to $67 billion in the second quarter, whereas service revenues rose 1.7% to $2.6 billion. Total revenues from Employer & Individual Domestic, Medicare & Retirement, and Community & State businesses came in at $67.9 billion, increasing 13.4% year over year. Also, from global operations, UNH reported revenues of $2.3 billion, up 3.5% year over year.
Forecast for Q3 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates a 10.9% year-over-year increase from the year-ago level of $62 billion, whereas our estimate suggests an 8.4% rise. The consensus mark for third-quarter operating income signals a 6.2% year-over-year rise from $3.8 billion a year ago.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have increased in the third quarter. This is expected to have resulted in UNH having lower premiums remaining after settling payments. As such, the consensus mark for third-quarter 2023 medical care ratio is pegged at 82.82%, indicating an increase from the year-ago level of 81.60%, while our estimate of 82.70% suggests a lower jump.
The Zacks Consensus Estimate for third-quarter 2023 global revenues indicates an increase of 1.8% year over year from $2.1 billion while our estimate implies a 1.7% rise. The consensus mark for UnitedHealthcare’s Community & State revenues suggests a 13.5% increase from the year-ago period’s $16.1 billion, whereas our model predicts a 13.2% gain.
The consensus mark for Medicare & Retirement business’ revenues suggests 14% year-over-year growth from $27.9 billion a year ago while our estimate indicates a 9.2% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in commercial domestic business indicates a 3.1% increase from the year-ago level of 26,555 thousand while our estimate implies a 2.8% rise.
Final Thoughts
The UnitedHealthcare unit is anticipated to have positioned the company for significant year-over-year growth. The Zacks Consensus Estimate for UNH’s third-quarter earnings of $6.33 per share signals a 9.3% increase from the prior-year figure of $5.79. The consensus estimate for revenues of $91.4 billion indicates a 13% increase from the year-ago reported figure.
Nonetheless, it is probable that increased costs and expenses have impacted the profit margins in the third quarter, introducing uncertainty regarding the potential for surpassing earnings expectations. Our estimate for medical costs indicates a 10.5% year-over-year increase while we expect operating expenses to have jumped 7.4%. Further, we expect the cost of products sold to have jumped 11.5% year over year in the third quarter.
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, which is not the case here.
UnitedHealth has an Earnings ESP of 0.00% and currently carries a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UnitedHealth Group Incorporated Price and EPS Surprise
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:
The Zacks Consensus Estimate for Apellis’ earnings per share for the to-be-reported quarter indicates a 47.4% year-over-year improvement. APLS beat earnings estimates twice in the past four quarters and missed on two occasions, the average surprise being 1.4%.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +5.43% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 82 cents per share, which improved 3.8% in the past 30 days. AZN beat earnings estimates in each of the past four quarters, the average surprise being 8.4%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +15.34% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Centene’s bottom line for the to-be-reported quarter indicates an increase of 15.4% from the year-ago period. The consensus mark for CNC’s revenues is pegged at $36.2 billion, signaling 0.8% year-over-year growth.
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Will UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q3 Earnings?
UnitedHealth Group Incorporated (UNH - Free Report) is set to release its third-quarter 2023 results on Oct 13, before the opening bell. Given the company's substantial involvement in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance. Growth in Community & State as well as Employer & Individual Domestic is expected to have supported the unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits around the world. While it has significant exposure to the Medicare and Medicaid markets, it also serves individuals and employers. The defensive properties of the sector enable UnitedHealth to maintain its momentum despite economic headwinds.
In the last reported quarter, the segment’s revenues jumped 13.1% year over year to $70.2 billion, whereas operating income improved 13.2% to $4.4 billion.
UnitedHealthcare's Q2 Performance
Considering the unit’s products, premiums increased 12.9% year over year to $67 billion in the second quarter, whereas service revenues rose 1.7% to $2.6 billion. Total revenues from Employer & Individual Domestic, Medicare & Retirement, and Community & State businesses came in at $67.9 billion, increasing 13.4% year over year. Also, from global operations, UNH reported revenues of $2.3 billion, up 3.5% year over year.
Forecast for Q3 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates a 10.9% year-over-year increase from the year-ago level of $62 billion, whereas our estimate suggests an 8.4% rise. The consensus mark for third-quarter operating income signals a 6.2% year-over-year rise from $3.8 billion a year ago.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have increased in the third quarter. This is expected to have resulted in UNH having lower premiums remaining after settling payments. As such, the consensus mark for third-quarter 2023 medical care ratio is pegged at 82.82%, indicating an increase from the year-ago level of 81.60%, while our estimate of 82.70% suggests a lower jump.
The Zacks Consensus Estimate for third-quarter 2023 global revenues indicates an increase of 1.8% year over year from $2.1 billion while our estimate implies a 1.7% rise. The consensus mark for UnitedHealthcare’s Community & State revenues suggests a 13.5% increase from the year-ago period’s $16.1 billion, whereas our model predicts a 13.2% gain.
The consensus mark for Medicare & Retirement business’ revenues suggests 14% year-over-year growth from $27.9 billion a year ago while our estimate indicates a 9.2% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in commercial domestic business indicates a 3.1% increase from the year-ago level of 26,555 thousand while our estimate implies a 2.8% rise.
Final Thoughts
The UnitedHealthcare unit is anticipated to have positioned the company for significant year-over-year growth. The Zacks Consensus Estimate for UNH’s third-quarter earnings of $6.33 per share signals a 9.3% increase from the prior-year figure of $5.79. The consensus estimate for revenues of $91.4 billion indicates a 13% increase from the year-ago reported figure.
Nonetheless, it is probable that increased costs and expenses have impacted the profit margins in the third quarter, introducing uncertainty regarding the potential for surpassing earnings expectations. Our estimate for medical costs indicates a 10.5% year-over-year increase while we expect operating expenses to have jumped 7.4%. Further, we expect the cost of products sold to have jumped 11.5% year over year in the third quarter.
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, which is not the case here.
UnitedHealth has an Earnings ESP of 0.00% and currently carries a Zacks Rank #3.
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth Group Incorporated price-eps-surprise | UnitedHealth Group Incorporated Quote
Stocks to Consider
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:
Apellis Pharmaceuticals, Inc. (APLS - Free Report) has an Earnings ESP of +21.28% 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 Apellis’ earnings per share for the to-be-reported quarter indicates a 47.4% year-over-year improvement. APLS beat earnings estimates twice in the past four quarters and missed on two occasions, the average surprise being 1.4%.
AstraZeneca PLC (AZN - Free Report) has an Earnings ESP of +5.43% and a Zacks Rank #3.
The Zacks Consensus Estimate for AstraZeneca’s bottom line for the to-be-reported quarter is pegged at 82 cents per share, which improved 3.8% in the past 30 days. AZN beat earnings estimates in each of the past four quarters, the average surprise being 8.4%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +15.34% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Centene’s bottom line for the to-be-reported quarter indicates an increase of 15.4% from the year-ago period. The consensus mark for CNC’s revenues is pegged at $36.2 billion, signaling 0.8% year-over-year growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.