UnitedHealth boosts 2022 profit forecast further on health services demand
2022.07.15 13:59
FILE PHOTO: The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. REUTERS/Mike Blake
(Reuters) -UnitedHealth Group Inc raised its full-year profit forecast for a second straight quarter on Friday, after strong sales at the company’s Optum healthcare services unit helped it top quarterly results estimates.
The largest U.S. healthcare company by market value offers government and employer-backed health plans, and also operates drug benefits and medical services provider Optum.
The Optum unit has been helping UnitedHealth (NYSE:UNH) withstand volatility in its health insurance business from pandemic-induced changes in patients’ use of medical services.
Revenue at the unit rose 18% to $45.1 billion from a year earlier, making up more than half of the company’s top line in the quarter ended June 30.
The Optum unit has seen a boost from an increase in value-based care arrangements, under which healthcare providers are paid based on the outcome of their services.
UnitedHealth’s medical care ratio or the percentage of premiums paid out for services fell to 81.5% in the quarter compared to 82.8% last year. A lower medical care ratio indicates a tighter rein on costs.
Analysts had been expecting a medical care ratio of 83.01%, according to Refinitiv IBES data.
UnitedHealth said it now expects 2022 adjusted profit between $21.40 and $21.90 per share, compared with $21.20 to $21.70 per share forecast earlier.
Net income attributable to the company rose 18.8% to $5.07 billion in the second quarter.
The company’s total sales rose 12.6% to $80.33 billion, topping analysts’ average estimate of $79.68 billion.
Excluding items, UnitedHealth earned $5.57 per share, beating estimates of $5.20 per share.
