UnitedHealth 4Q profit slips 1 pct. as costs rise
UnitedHealth Group Inc.'s fourth-quarter net income slipped 1 percent, as a rise in costs from medical claims and other expenses countered revenue gains for the nation's largest health insurer.
The Minnetonka, Minn., company also said Thursday it was reaffirming a forecast for 2013 earnings it made in November.
The insurer turned in "a solid quarter with few surprises, but less impressive than the company's performance earlier in the year," Leerink Swann analyst Jason Gurda said in a research note.
UnitedHealth earned $1.24 billion, or $1.20 per share, in the three months that ended Dec. 31. That compares with $1.26 billion, or $1.17 per share, in the last quarter of 2011, when the company had more shares outstanding.
Total revenue climbed 11 percent to $28.77 billion, but medical costs grew 12 percent to $20.8 billion.
The insurer normally trumps Wall Street earnings expectations, but this performance matched average analyst forecasts. Analysts expected earnings of $1.20 per share on $28.23 billion in revenue, according to FactSet.
Health insurance is UnitedHealth's largest business, but it also operates segments that sell information technology services and pharmacy benefits management. UnitedHealth also is the largest provider of Medicare Advantage plans, which are privately run versions of the government's Medicare program for the elderly and disabled people.
UnitedHealth's operating costs climbed 13 percent to $4.85 billion in the quarter. It also recorded a smaller gain, compared to the 2011 quarter, of $140 million because claims left over from earlier periods coming in lower than expected, which allowed it to release money held in reserve. That compares with a $310 million gain in the final quarter of 2011.
Business Photo Galleriesview all
- 17700Oklahoma weather: Crews work to clear storm damage in Oklahoma City as the state braces for severe weather Sunday.
- 8160OKC Thunder: Thunder trio praise fans before potential departures
- 6156Student shot dead during botched home invasion
- 6118Oklahoma Severe Storm Updates
- 5947OKC Thunder GM Sam Presti won't amnesty Kendrick Perkins
- 4682Oklahoma medical examiner reports cause of deaths in Grand Lake boat crash
- 4603Oklahoma State football: Todd Monken thinks Wes Lunt should've stayed in Stillwater