Are Investors Too Cautious on UnitedHealth After Earnings?
UnitedHealth posted better than expected third-quarter financial results before the markets opened on Wednesday, but shares retreated afterward.
When UnitedHealth Group Inc. (NYSE: UNH | UNH Price Prediction) released its third-quarter financial results before the markets opened on Wednesday, the firm posted $3.51 in earnings per share (EPS) and $65.1 billion in revenue. Analysts were calling for EPS of $3.09 on $63.96 billion in revenue. In the same period of last year, UnitedHealth said it had $3.88 in EPS and revenue of $60.35 billion.
During the latest quarter, the company saw continued growth, led Optum and the UnitedHealthcare public-sector and senior benefits businesses, despite the continued setbacks from COVID-19. Total revenues grew 8%, year over year, reflecting balanced, broad-based revenue growth across Optum and UnitedHealthcare.
UnitedHealthcare revenues increased 4.8% year over year to $50.4 billion. Third-quarter earnings from operations at UnitedHealthcare were $2.1 billion, down from $2.7 billion from the same period last year.
Optum third-quarter revenues and operating earnings of $34.9 billion and $2.6 billion, respectively, increased from $28.8 billion and $2.4 billion a year ago.
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The company updated its outlook for the 2020 full year. UnitedHealth now expects to see EPS in the range of $16.50 to $16.75, an increase of a quarter on both ends. Consensus estimates call for $16.58 in EPS and $255.65 billion in revenue for the full year.
On the books, the company ended the quarter with $20.81 billion in cash and cash equivalents, up from $14.25 billion at the end of 2019.
UnitedHealth stock traded down over 2% to $323.54 early Wednesday, in a 52-week range of $187.72 to $333.70. The consensus price target is $352.32.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
