UnitedHealth Tops 1Q Expectations, Raises 2017 Forecast

UnitedHealth Group trumped first-quarter forecasts and raised expectations for the year after pulling in earnings growth of 15 percent or more from its two main businesses.

The nation's largest health insurer now expects adjusted 2017 earnings of between $9.65 and $9.85 per share after predicting $9.30 to $9.60 per share last fall.

Analysts polled by FactSet expect earnings of $9.50 per share.

The Minnetonka, Minnesota, company's stock started climbing early Tuesday, after results came out.

Health insurance is UnitedHealth Group Inc.'s main business, but it also runs an Optum segment that provides pharmacy benefits management and technology services and also operates clinics and doctor's offices.

Operating earnings from the company's insurance businesses climbed 15 percent to $2.1 billion, helped by revenue gains from its Medicare and retirement business and work with the state-federal Medicaid program for the poor. The company also saw its individual enrollment plunge as it withdrew from nearly all the Affordable Care Act's individual health insurance exchanges.

UnitedHealth had warned last year that it expected to lose more than $800 million on that business, and it scaled back its participation to three states after rapidly expanding to 34.

Several other major insurers like Aetna Inc. and Humana Inc. have pared back their participation after booking deep losses on the exchanges, which face an uncertain future as Republicans in Congress mull another attempt at repealing and replacing the federal law.

UnitedHealth also saw operating earnings climb nearly 16 percent to $1.3 billion from its Optum segment.

Overall, the company earned $2.17 billion in the first quarter on $48.72 billion in total revenue. Adjusted results came to $2.37 per share.

Analysts forecast earnings of $2.17 per share on $48.33 billion in revenue.

Shares jumped more than 2 percent, or $3.82, to $171 in premarket trading, approaching the all-time high of more than $172 that the stock reached last month.

UnitedHealth is the first health insurer to announce earnings every quarter, and many analysts and investors see it as a bellwether for other insurers.

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