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Will UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q1 Earnings?
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UnitedHealth Group Incorporated (UNH - Free Report) is set to release its first-quarter 2024, results on Apr 16, 2024 before the opening bell. As a significant player in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance, partially offset by higher medical costs. Growth in Community & State, Medicare & Retirement and Employer & Individual Domestic is expected to have supported the UnitedHealthcare unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits worldwide. 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 12.3% year over year to $70.8 billion, whereas the operating income improved 6.5% to $3.1 billion.
UnitedHealthcare's Q4 Performance
Considering the unit’s products, premiums increased 12.9% year over year to $67.8 billion in the fourth quarter, but service revenues fell 6.9% to $2.4 billion. Total revenues from the Employer & Individual Domestic, Medicare & Retirement and Community & State businesses increased 4.6%, 15.5% and 14.7% year over year, respectively, in the fourth quarter. Also, from global operations, UNH reported revenues of $2.4 billion, up 10.8% year over year.
Forecast for Q1 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates a 7.3% year-over-year increase from the year-ago level of $70.5 billion, whereas our model estimate suggests a 6% rise. The consensus mark for first-quarter operating income signals a more than 3% year-over-year rise from $4.3 billion a year ago, while our model is pegged at $4.35 billion.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have remained elevated in the first quarter. This is expected to have resulted in UNH having a lower portion of premiums remaining after settling payments. As such, the consensus mark for the first-quarter 2024 medical care ratio is pegged at 83.67%, indicating an increase from the year-ago level of 82.20%, while our estimate of 83.85% suggests a higher jump.
The Zacks Consensus Estimate for first-quarter 2024 global revenues indicates an increase of 5.8% year over year from $2.2 billion. Our model estimate for Employer & Individual Domestic revenues indicates more than 5% year-over-year growth to nearly $17.4 billion.
The consensus mark for UnitedHealthcare’s Community & State revenues suggests a 6% increase from the year-ago period’s $18.8 billion, whereas our model predicts a 4.4% gain. The consensus estimate for Medicare & Retirement business’ revenues suggests 7.5% year-over-year growth from $33 billion a year ago, while our estimate indicates a 7.3% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in the commercial domestic business indicates a more than 4% increase from the year-ago level of 27,350 thousand, while our estimate implies a nearly 3% rise. The consensus mark for total UnitedHealthcare medical membership indicates 2.2% year-over-year growth in the first quarter, while our estimate predicts a 2.3% increase.
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 first-quarter earnings of $6.70 per share signals a more than 7% increase from the prior-year figure of $6.26. The consensus estimate for revenues of $99.4 billion indicates an 8.1% increase from the year-ago reported figure.
However, elevated costs and expenses are expected to have influenced first-quarter profit margins, creating uncertainty about exceeding earnings expectations. Our estimate for medical costs indicates a more than 8% year-over-year increase, while we expect operating expenses to have increased more than 7%. Further, we expect the cost of products sold to have jumped more than 6% year over year in the first quarter.
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time. 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 -1.80% and currently carries a Zacks Rank #3.
UnitedHealth Group Incorporated Price and EPS Surprise
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
The Zacks Consensus Estimate for Inspire Medical’s bottom line for the to-be-reported quarter has improved by 3.1% over the past month. INSP beat earnings estimates in each of the past four quarters, the average surprise being 353.6%.
Edwards Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #2.
The Zacks Consensus Estimate for Edwards Lifesciences’ bottom line for the to-be-reported quarter indicates 3.2% year-over-year growth. EW beat earnings estimates in two of the past four quarters and met on the other occasions, with an average surprise of 0.8%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +0.71% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s earnings per share for the to-be-reported quarter indicates a 33.3% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 5.9%.
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Will UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q1 Earnings?
UnitedHealth Group Incorporated (UNH - Free Report) is set to release its first-quarter 2024, results on Apr 16, 2024 before the opening bell. As a significant player in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance, partially offset by higher medical costs. Growth in Community & State, Medicare & Retirement and Employer & Individual Domestic is expected to have supported the UnitedHealthcare unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits worldwide. 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 12.3% year over year to $70.8 billion, whereas the operating income improved 6.5% to $3.1 billion.
UnitedHealthcare's Q4 Performance
Considering the unit’s products, premiums increased 12.9% year over year to $67.8 billion in the fourth quarter, but service revenues fell 6.9% to $2.4 billion. Total revenues from the Employer & Individual Domestic, Medicare & Retirement and Community & State businesses increased 4.6%, 15.5% and 14.7% year over year, respectively, in the fourth quarter. Also, from global operations, UNH reported revenues of $2.4 billion, up 10.8% year over year.
Forecast for Q1 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates a 7.3% year-over-year increase from the year-ago level of $70.5 billion, whereas our model estimate suggests a 6% rise. The consensus mark for first-quarter operating income signals a more than 3% year-over-year rise from $4.3 billion a year ago, while our model is pegged at $4.35 billion.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have remained elevated in the first quarter. This is expected to have resulted in UNH having a lower portion of premiums remaining after settling payments. As such, the consensus mark for the first-quarter 2024 medical care ratio is pegged at 83.67%, indicating an increase from the year-ago level of 82.20%, while our estimate of 83.85% suggests a higher jump.
The Zacks Consensus Estimate for first-quarter 2024 global revenues indicates an increase of 5.8% year over year from $2.2 billion. Our model estimate for Employer & Individual Domestic revenues indicates more than 5% year-over-year growth to nearly $17.4 billion.
The consensus mark for UnitedHealthcare’s Community & State revenues suggests a 6% increase from the year-ago period’s $18.8 billion, whereas our model predicts a 4.4% gain. The consensus estimate for Medicare & Retirement business’ revenues suggests 7.5% year-over-year growth from $33 billion a year ago, while our estimate indicates a 7.3% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in the commercial domestic business indicates a more than 4% increase from the year-ago level of 27,350 thousand, while our estimate implies a nearly 3% rise. The consensus mark for total UnitedHealthcare medical membership indicates 2.2% year-over-year growth in the first quarter, while our estimate predicts a 2.3% increase.
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 first-quarter earnings of $6.70 per share signals a more than 7% increase from the prior-year figure of $6.26. The consensus estimate for revenues of $99.4 billion indicates an 8.1% increase from the year-ago reported figure.
However, elevated costs and expenses are expected to have influenced first-quarter profit margins, creating uncertainty about exceeding earnings expectations. Our estimate for medical costs indicates a more than 8% year-over-year increase, while we expect operating expenses to have increased more than 7%. Further, we expect the cost of products sold to have jumped more than 6% year over year in the first quarter.
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time. 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 -1.80% and currently carries a Zacks Rank #3.
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth Group Incorporated price-eps-surprise | UnitedHealth Group Incorporated Quote
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
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:
Inspire Medical Systems, Inc. (INSP - Free Report) has an Earnings ESP of +18.04% 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 Inspire Medical’s bottom line for the to-be-reported quarter has improved by 3.1% over the past month. INSP beat earnings estimates in each of the past four quarters, the average surprise being 353.6%.
Edwards Lifesciences Corporation (EW - Free Report) has an Earnings ESP of +1.68% and a Zacks Rank #2.
The Zacks Consensus Estimate for Edwards Lifesciences’ bottom line for the to-be-reported quarter indicates 3.2% year-over-year growth. EW beat earnings estimates in two of the past four quarters and met on the other occasions, with an average surprise of 0.8%.
Universal Health Services, Inc. (UHS - Free Report) has an Earnings ESP of +0.71% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Universal Health’s earnings per share for the to-be-reported quarter indicates a 33.3% year-over-year jump. UHS beat earnings estimates in each of the past four quarters, the average surprise being 5.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.