UnitedHealth Group hiked its 2016 earnings forecast again after its profit swelled 23 percent to nearly $2 billion in the third quarter, helped by gains both in and outside its core insurance business.
The nation's biggest health insurer now expects adjusted, full-year earnings of about $8 per share, up from its previous forecast of $7.80 to $7.95 per share.
Wall Street had been projecting per-share earnings of $7.93, according to FactSet, and the company's stock rose before the opening bell Tuesday.
Operating earnings jumped more than 10 percent to $2.1 billion for the company's UnitedHealthcare business, which sells insurance and runs Medicaid plans.
The insurer added nearly a million customers through its employer-sponsored and individual coverage. Medicare Advantage membership grew 12 percent, and total enrollment topped 48 million in the quarter.
Health insurance is UnitedHealth's main business, but it also has been growing its Optum business, which provides pharmacy benefits management and technology services and runs clinics and doctor's offices. Operating earnings from that segment surged 36 percent to $1.5 billion after jumping 46 percent in the second quarter.
Overall, UnitedHealth earned $1.97 billion in the three-month period that ended Sept. 30, up from $1.6 billion in the previous year's quarter. Adjusted earnings totaled $2.17 per share in the most recent quarter.
The results topped expectations on Wall Street, where analysts forecast earnings of $2.08 per share, according to Zacks Investment Research.
Total revenue grew nearly 12 percent to $46.29 billion in the quarter.
The insurer offered no update Tuesday on its performance in the Affordable Care Act's public exchanges.
UnitedHealth said in July that it expected to lose around $850 million from its ACA-compliant individual business, which is a small slice of its total operation. CEO Stephen Hemsley told analysts that his company would have no meaningful exposure next year to the exchanges, a key element in the law's push to expand coverage.
UnitedHealth expanded to sell coverage in 34 states this year. But next year, it will only offer insurance on exchanges in Nevada, Virginia and New York.
Other insurers also have struggled to develop that business, and defections from the exchanges are expected to hurt customer choice in many markets later this fall, when the enrollment period begins for 2017 plans.
Shares of UnitedHealth Group Inc., based in Minnetonka, Minnesota, advanced 2 percent, or $2.62 to $136.75 in premarket trading.
The insurer's shares have climbed 14 percent since the beginning of the year. That tops both the Dow Jones Industrial Average, of which UnitedHealth is a component. It also has outpaced the performance of other major insurers like Aetna Inc. and the Blue Cross-Blue Shield carrier Anthem Inc., which are both fighting federal regulators to close multi-billion dollar acquisitions.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNH at http://www.zacks.com/ap/UNH
Keywords: UnitedHealth Group, Earnings Report, Priority Earnings