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UnitedHealth's (UNH) Q1 Earnings Beat on Higher Revenues

Zacks Equity Research

Have you been eager to see how UnitedHealth Group Inc. UNH performed in Q1 in comparison with the market expectations? Let’s quickly scan through the key facts from this health insurer’s earnings release this morning:

An Earnings Beat

UnitedHealth reported net operating earnings per share of $2.37, comfortably beating the Zacks Consensus Estimate of $2.18 and was up 31% year over year.  Earnings beat reflected higher revenues and membership growth.

Earnings Surprise History

Regarding earnings surprise history, before posting an earnings beat in Q1, the company delivered positive earnings surprises in each of the trailing four quarters, with an average positive surprise of 3.8%.

UnitedHealth Group Incorporated Price and EPS Surprise

UnitedHealth Group Incorporated Price and EPS Surprise | UnitedHealth Group Incorporated Quote

Revenue Came In Higher Than Expected   

UnitedHealth posted net revenues of $48.7 billion, which outpaced the Zacks Consensus Estimate of $48.24 billion. Further, it was up 9.4% year over year.

Key Takeaways

Earnings from operations of $3.4 million was up 13.33% year over year.
Adjusted cash flows were $2.0 billion compared to $2.3 billion in the year ago quarter.

Consolidated medical care ratio of 82.4% increased 70 basis points year-over-year.

Operating cost ratio of 14.4% decreased 80 basis points year-over-year, due to the health insurance tax moratorium.

The company served 49.32 million members up from 47.67 million members in the year ago quarter.

Guidance Update

Driven by strong earnings, UnitedHealth Group raised its financial outlook. It now expects 2017 revenues of approximately $200 billion, GAAP net earnings of $9.10 to $9.30 per share and adjusted net earnings of $9.65 to $9.85 per share. Cash flows from operations is expected at approximately $12 billion.

What Zacks Rank Says

UnitedHealth carries a Zacks Rank # 2 (Buy). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. Now, it all depends on the analysts’ take on the just-released earnings report.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Check back later for our full write up on this UnitedHealth earnings report later!

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