But UnitedHealth Results Top Expectations Fall

 

Wednesday, Apr 22,2009, 10:02:05 AM   Click:

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MINNEAPOLIS_Health insurer UnitedHealth Group Inc posted a slightly smaller profit on lower investment income and higher costs but still exceeded analysts' expectations.

Enrollment has declined in higher-margin schemes sponsored by employers, Minnetonka, Minnesota-based insurer said, while the increase in less profitable, government-sponsored and senior citizen plans. The company reported investment and other income fell 43 percent to $ 158 million because of the difficult market.

Earnings fell to $ 984 million or 81 cents per share. It is from $ 994 million or 78 cents per share last year for the first quarter.

Revenue rose 8.4 percent to $ 22 billion to $ 20.3 billion due to growth in the blast and plans, as well as acquisitions.

Analysts were expecting earnings of 68 cents per share on revenue of $ 21.37 billion.

The share of premiums to cover claims remained stable at 82.4 per cent. Enrollment has declined slightly.


Profit margins for operation of the company's health care services sector has declined eight-tenths of a percentage point to 6.4 percent due to the passage of private and growth in high and government plans. As unemployment has increased, many insurers have seen their activity sponsored by the employer or shrink to grow more slowly.

The growth of the activity sponsored by the government could raise concerns among investors already concerned about a proposed tightening of reimbursement rates in the federal Medicare Advantage program.

Shares of UnitedHealth and several other insurers also plunged in late February and early March after President Barack Obama unveiled a draft budget that includes small payments for Medicare Advantage insurers. The possibility of reduced payments for these fast-growing private plans remains a concern.

The sector was also affected by broader fears about the future of the Obama effort to rework the U.S. health care system and the effect this might have on private insurers.

UnitedHealth backed its outlook for full year earnings of $ 2.90 to $ 3.15 per share, if it said that the wide range reflects the uncertainty of the economy.