Insurer UnitedHealth Group Inc. predicts 2013 earnings growth of up to 5 percent compared with its forecast for this year, but analysts have higher expectations.
The Minnetonka, Minn., company released its initial forecast for the new year on Monday, a day ahead of its annual investor conference in New York City. UnitedHealth said it expects 2013 earnings to range between $5.25 and $5.50 per share on $123 billion to $124 billion in revenue.
Analysts expect, on average, earnings of $5.60 per share on $118.6 billion in revenue, according to FactSet.
UnitedHealth covers more than 36 million people as the nation's largest health insurer. The company, which also operates information technology and pharmacy benefits management segments, has a reputation on Wall Street for making conservative earnings forecasts initially and then raising them several times during the year.
For instance, the company raised its 2012 earnings forecast for the third time this year when it reported third-quarter results in October. UnitedHealth now expects earnings of $5.20 to $5.25 per share.
Analysts expect, on average, earnings of $5.25 per share.
The insurer raises its forecast through the year in part to reflect gains it records when claims left over from earlier periods come in lower than expected. UnitedHealth doesn't include a projection for these gains in its initial forecast, but it adds them to the outlook as they occur, Citi analyst Carl McDonald said.
The insurer's 2013 earnings forecast is conservative, but it also reflects challenges that the industry will face next year, Goldman Sachs analyst Matthew Borsch said in a research note.