UnitedHealth (NYSE: UNH) shares perked Tuesday after it reported fourth-quarter earnings that beat Wall Street’s expectations, helped by growth in its services business.
Earnings came in at $3.28 per share during the quarter, vs. $3.21 per share, forecast by Refinitiv. Revenue registered at $58.42 billion vs. $58.01 billion forecast.
Revenue from Optum, which includes the company’s pharmacy benefits management business, grew 13% to $27.56 billion in the fourth quarter, while revenue from its mainstay insurance business grew 11.1% to $46.23 billion.
The company said its full-year revenues in 2018 grew 12% to $226 billion. UnitedHealth reaffirmed its 2019 forecast for earnings between $14.40 and $14.70 per share.
The Hopkins, Minnesota-based company’s medical loss ratio, or the percentage of premiums paid out for medical services, was 81.6% in the quarter compared to 82.1% last year. The Street was expecting 81.8%.
One analyst noted there were "no red flags" in the report, which she said "just bodes well for the group."
UnitedHealth, the largest U.S. health insurance and health-care services firm, was one of a handful of Dow components trading higher ahead of earnings.
United’s earnings beat analyst’s expectations more than 90% of the time, according to Bespoke Investment Group, on average by 2.9%. The firm’s revenues top estimates about two-thirds of the time by about 1% on average.
Shares jumped $4.31, or 1.7%, to $252.37
