Actionable news
0
All posts from Actionable news
Actionable news in UNH: UNITEDHEALTH GROUP INCORPORATED,

UnitedHealth Group: N E W S R E L E A S E Investors: Brett Manderfeld John S. Penshorn Media: Don Nathan Tyler Mason Vice President Senior Vice President Senior Vice President Vice President

The following excerpt is from the company's SEC filing.

952-936-7216

952-936-7214

952-936-1885

424-333-6122

(For Immediate Release)

UNITEDHEALTH GROUP REPORTS FIRST QUARTER RESULTS

First Quarter Revenues of $44.5 Billion Grew 25% Year-Over-Year

UnitedHealthcare Added 2 Million More People Domestically in the Past 12 Months,

Including 1.3 Million More People in the First Quarter

Optum Revenues of $19.7 Billion Grew 54% Year-Over-Year

Cash Flows from Operations were $2.3 Billion in the Quarter

First Quarter Adjusted Net Earnings of $1.81 Per Share Grew 17% Year-Over-Year

NEW YORK, NY

UnitedHealth Group (NYSE: UNH) today reported first quarter results, highlighted by strong execution, consistent operating performance and compelling product and service offerings driving broad-based growth across the Company.

“Our commitment and determination to constantly improve how we serve customers and consumers in health benefits and services is reflected in consistent, market-leading organic growth and strong levels of customer retention in the first quarter,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group.

Based on the first quarter results and business trends, the Company now expects 2016 revenues of approximately $182 billion and adjusted net earnings in a range of $7.75 to $7.95 per share. The increase in the outlook for adjusted net earnings of $0.15 per share is due to changes in the expected income tax rate and intangible amortization. Management affirmed its outlook for strong cash flows from operations of up to $10 billion.

Quarterly Financial Performance

Three Months Ended

March 31,

December 31,

$44.5 billion

$35.8 billion

$43.6 billion

Earnings From Operations

$3.0 billion

$2.6 billion

$2.5 billion

Net Margin

UnitedHealth Group first quarter 2016 revenues of $44.5 billion grew 25 percent or $8.8 billion year-over-year. Growth was broad-based and reflected growing market demand for the Company’s product and service offerings. UnitedHealthcare revenues grew 10 percent and Optum revenues grew 54 percent, with revenue growth of

20 percent or more at each Optum business.

First quarter earnings from operations were $3 billion and adjusted net earnings grew 17 percent year-over-year to $1.81 per share. As expected, the first quarter net margin of 3.6 percent decreased 40 basis points year-over-year, due principally to an increased level of pharmacy care services business.

First quarter 2016 cash flows from operations of $2.3 billion were 1.4 times net earnings.

The consolidated medical care ratio increased 30 basis points year-over-year to 81.7 percent in the first quarter of 2016, reflecting the extra calendar day of service in the quarter. Prior year medical reserve development was $360 million, compared to $140 million in the first quarter of 2015, and first quarter 2016 medical cost trends were well-controlled and consistent with management expectations.

The first quarter 2016 operating cost ratio of 15.2 percent decreased 110 basis points year-over-year primarily due to changes in business mix.

The first quarter 2016 tax rate of 39.8 percent decreased 350 basis points year-over-year from 43.3 percent in first quarter 2015, due to the adoption of a new accounting standard. Under the new standard, certain corporate tax benefits related to stock-based compensation programs are recorded through the tax provision. This new standard, which added roughly $0.06 per share to net earnings due to the concentration of activity in the first quarter, is expected to have considerably less earnings impact in the remaining quarters of 2016.

First quarter 2016 days claims payable of 51 days increased 4 days year-over-year and 1 day sequentially; days sales outstanding of 16 days increased 3 days, due to increased government receivables and business mix.

The Company’s financial position is strong, with a debt to total capital ratio of 49 percent at March 31, 2016. The Company expects this ratio to decrease during the second half of 2016 as debt levels are reduced. First quarter 2016 annualized return on equity was 19 percent, an increase of 1 percentage point year-over-year.

UnitedHealth Group repurchased 4.2 million shares for $0.5 billion in first quarter 2016, at a weighted average price of $119 per share.

UnitedHealthcare provides health care benefits, serving individuals and employers ranging from sole proprietorships to large, multi-site and national and international organizations; delivers health and well-being benefits to Medicare beneficiaries and retirees; manages health care benefit programs on behalf of state Medicaid and community programs; and serves the nation’s military service members, retirees and their families through the TRICARE program.

$35.9 billion

$32.6 billion

$32.8 billion

$1.9 billion

$949 million

Operating Margin

UnitedHealthcare continues to consistently grow as more customers choose its products and services, due to the combination of distinctive service, product innovation and integrated clinical and network value they offer. UnitedHealthcare has developed a balanced mix of business across the commercial, government and international markets, reflecting its deliberate strategy of diversifying and serving the breadth of needs in those markets.

UnitedHealthcare grew organically over the past year to serve 2 million more people in the U.S. medical benefits markets, with well-diversified growth across commercial, Medicare and Medicaid offerings. First quarter growth contributed 1.3 million people to this total, helping UnitedHealthcare’s first quarter revenues grow $3.3 billion or 10 percent year-over-year to nearly $36 billion.

First quarter 2016 earnings from operations for UnitedHealthcare of $1.9 billion were roughly even with first quarter 2015, as strong growth largely offset a 60 basis point reduction in operating margins to 5.2 percent. The year-over-year margin decrease was driven by increased quarterly costs from an extra calendar day of service and public exchange performance, partially offset by reserve development.

UnitedHealthcare Employer & Individual

UnitedHealthcare Employer & Individual grew to serve approximately 700,000 more people in the first quarter and 1 million more people year-over-year. First quarter growth was well-balanced, with growth of more than 300,000 people in risk-based and nearly 400,000 people in fee-based offerings, including increases in people served through the fee-based national account, public sector, mid-sized employer, small employer and individual segments of the market.

First quarter revenues of $12.8 billion grew $1.4 billion or 12 percent year-over-year, driven by growth in the number of people served and price increases matching medical cost trends for risk-based products.

UnitedHealthcare Medicare & Retirement

First quarter 2016 UnitedHealthcare Medicare & Retirement revenues of $14.1 billion grew $1.3 billion or 10 percent year-over-year, due to consistent growth in services to seniors:

In Medicare Advantage, UnitedHealthcare grew to serve 325,000 more seniors year-over-year, a 10 percent increase, including nearly...


More