UnitedHealth Group, the biggest players in the US health insurance industry, issued solid financials for the second quarter of 2016. Revenues increased 28% y-o-y to $46.5 bn and surpassed consensus estimate of $45.3 bn driven by business expansion in both health care benefits and health care services. The company’s health benefits segment – UnitedHealthcare – witnessed revenue growth of 14% to $37.6 bn while revenues from Optum jumped 52% to $20.6 bn. The company’s Medical membership increased to 47.98 mn from 45.86 mn in the prior-year quarter. Operating income rose 10.6% to $3.203 bn, and operating margin came in at 6.9%. Adjusted earnings per share improved 13% to $1.96 beating analysts’ average projection of $1.89. The company also slightly raised its 2016 adjusted EPS outlook to the range of $7.80-7.95.In Q2, UnitedHealth generated cash flow from operating activities of $1.7 bn, up 45% y-o-y. Debt-to-total-capital ratio was 47.8% at the end of Q2, down 90 basis points from the 2015-end level. The company expects the ratio to improve in the second half of 2016 with the lowering of the debt level. During the reported quarter, UnitedHealth hiked the annual dividend by 25% to $2.50 per share, which offers dividend yield of around 1.8%.UnitedHealth’s results reflect consistent gains from its robust Optum segment. Going forward, higher membership, a strong balance sheet and a niche market position are some of the other positives that UnitedHealth should benefit from. Also, the company announced plans to exit its unprofitable ObamaCare exchange business.I expect UnitedHealth’s shares to continue to rise, with medium-tern yarget at $155. $UNH, UnitedHealth Group Incorporated / 1440