UnitedHealth Group's (UNH) fourth-quarter earnings jumped 15 percent and topped expectations, as the nation's largest health insurer booked a sizeable gain from a business that doesn't sell insurance.
The Minnetonka, Minn., company's
shares climbed 4 percent in early premarket trading Thursday after it released
UnitedHealth said operating earnings
for its Optum segment jumped 43 percent to $655 million in the quarter. Optum
provides information technology and data services and pharmacy benefits
management, and UnitedHealth executives frequently tout its growth prospects to
Revenue from the segment climbed 36
percent in the quarter.
Overall, UnitedHealth earned $1.43
billion, or $1.41 per share, in the three months that ended December 31. That's
up from $1.24 billion, or $1.20 per share, in the 2012 quarter. Total revenue
climbed 8.2 percent to $31.12 billion.
Analysts expected, on average,
earnings of $1.40 per share on $31.15 billion in revenue, according to FactSet.
UnitedHealth Group Inc. is the first
insurer to report earnings every quarter. Many see it as a bellwether for other
The insurer's total enrollment climbed
11 percent to 45.4 million people compared to the end of 2012. That was helped
by the start of a contract to cover military members and their families through
the government's Tricare program.
UnitedHealth also said Thursday that
it still expects 2014 earnings to range between $5.40 and $5.60 per share on
revenue of $128 billion to $129 billion, the same forecast it announced last
month before its annual investor meeting.
Analysts expect, on average, earnings
of $5.64 per share on $130.59 billion in revenue.
UnitedHealth shares jumped $3.04, or
4.1 percent, to $77.90 in premarket trading about 2 1/2 hours before the market
open. The stock jumped nearly 39 percent last year to close 2013 at $75.30
after setting several all-time high prices that the insurer has already topped
in the new year.