UnitedHealth's 3Q Profit Grows 21 Percent
MINNEAPOLIS (AP) _ UnitedHealth Group Inc., one of the nation's largest health insurers, reported Friday that profit grew 21 percent in the third quarter on improvement in all business segments.
Shares of UnitedHealth rose $1.97, or 3.6 percent, to $56.17 in morning trading on the New York Stock Exchange. The stock has traded in a 52-week range between $32.31 and $58.
Quarterly earnings rose to $842 million, or 64 cents per share, from $698 million, or 52 cents per share, a year earlier. Revenue rose 15 percent to $11.32 billion from $9.86 billion.
Analysts polled by Thomson Financial expected earnings of 63 cents per share on revenue of $11.33 billion.
Operating earnings at the Minnetonka, Minn.-based business increased 27 percent to $1.38 billion from $1.09 billion in the prior year.
The company served 11.4 million people as of Sept. 30, an increase of 265,000 during the quarter and 460,000 for the year to date.
Unitedhealth Group Inc. said it expects full-year 2005 earnings of $2.48 per share, up 26 percent, and sees further growth of 15 percent or more for 2006, before any contributions from the launch of new prescription drug plans for seniors or its pending acquisition of PacifiCare Health Systems Inc.
``Overall growth and earnings in 2005 have clearly been strong,'' Chairman and Chief Executive William W. McGuire told analysts on a conference call Friday. He added that results so far ``provide a strong basis for growth and an outstanding financial performance in 2006.''
Analysts expect earnings of $2.47 per share for 2005 and $2.93 per share for 2006.
McGuire said there were too many uncertainties about the launch of the new prescription drug plan through the company's Ovations unit to include in 2006 projections, but he said he was optimistic about the business.
``Once people understand it, this is a program that makes sense for a lot of people,'' he said.
To help people understand the program, the company rolled out a 24-page brochure on the program in July that is distributed through several major pharmacy chains.
Ovations Chief Executive Officer Louis Quam said the company has seen heavy traffic on its Web site and call centers regarding its drug plan.
Ovations expects the federal government to assign 650,000 seniors to its lead drug plan, AARP MedicareRX, on Jan. 1 because the company says it's priced below the average market price in 33 of 34 program regions.
Voluntary enrollments for the new drug coverage begins Nov. 15. The benefit begins Jan. 1, 2006.