UnitedHealth Group Revenues Stung by Obamacare

Health and Healthcare

Published: April 17, 2014 7:30 am

UnitedHealth Group Inc. (NYSE: UNH) reported first-quarter results before markets opened Thursday. The health insurance and benefits management firm posted diluted earnings per share (EPS) of $1.10 on revenues of $31.7 billion. In the same period a year ago, UnitedHealth reported EPS of $1.16 on $30.34 billion in revenue. First-quarter results also compare to the consensus estimates for EPS of $1.09 on revenues of $31.99 billion.

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The company’s CEO said:

We performed steadily in the first quarter, with continued momentum from our Optum health services platform and year-over-year growth across our UnitedHealthcare health benefits platform offset by headwinds from new ACA taxes and Medicare Advantage funding deficiencies. We continue to help enable a more effective, more modern health care system that better serves consumers and responds to a national imperative to improve the performance of health care and reduce its costs.

The company said it repurchased $911 million in stock in the first quarter, acquiring more than 12 million shares at an average price of approximately $75 per share. Also it distributed $276 million in dividends to shareholders, representing dividend growth of 28% year-over-year.

For the full year, the company reaffirmed its forecast for revenues of $128 billion to $129 billion, with EPS in a range of $5.40 to $5.60. The consensus forecast for the full year so far calls for $5.59 per share on $128.92 billion. For the current quarter, the estimates are $1.33 per share earnings and $32.04 billion in revenue.

Note that Citigroup downgraded the stock to Neutral from Buy ahead of the earnings report.

Shares were inactive in premarket trading Thursday, after ending Wednesday at $78.19, in a 52-week range of $58.03 to $83.32. Thomson Reuters had a consensus analyst price target of around $85.09 before the results were announced.

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