UnitedHealth Group Inc. Reports Operating Results (10-Q)

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Oct 30, 2012
UnitedHealth Group Inc. (UNH, Financial) filed Quarterly Report for the period ended 2012-09-30.

Unitedhealth Group Inc has a market cap of $57.6 billion; its shares were traded at around $55.78 with a P/E ratio of 10.6 and P/S ratio of 0.6. The dividend yield of Unitedhealth Group Inc stocks is 1.5%. Unitedhealth Group Inc had an annual average earning growth of 18.2% over the past 10 years. GuruFocus rated Unitedhealth Group Inc the business predictability rank of 3.5-star.

Highlight of Business Operations:

Net earnings of $1.6 billion and diluted earnings per share of $1.50 increased 23% and 28%, respectively.

UnitedHealthcare's revenue growth for the three and nine months ended September 30, 2012 was primarily due to growth in the number of individuals served, commercial premium rate increases related to expected increases in underlying medical cost trends and the impact of lower expected premium rebates.

UnitedHealthcare's earnings from operations for the three and nine months ended September 30, 2012 increased compared to the prior year primarily due to the factors that increased revenues combined with an improvement in the medical care ratio driven by effective management of medical costs and increased favorable medical reserve development. The increased favorable development for both the three and nine months ended September 30, 2012 was driven by lower than expected health system utilization levels and increased efficiency in claims handling and processing.

The decreases in OptumRx revenues for both the three and nine months ended ended September 30, 2012 were due to the reduction in UnitedHealthcare Medicare Part D plan participants. The three month revenue results were also negatively impacted by consumers' rapid migration from brand name prescription drugs to cost-effective new generic offerings. Intersegment revenues eliminated in consolidation were $3.8 billion and $11.7 billion for the three and nine months ended September 30, 2012 and $4.2 billion and $12.3 billion for the three and nine months ended September 30, 2011.

Cash flows from operating activities for the nine months ended September 30, 2012 decreased $1.9 billion, from the comparable period in 2011. The decreased cash flows were primarily driven by the decrease in unearned revenues of $2.3 billion due to the 2011 amount including the early receipt of the October 2011 CMS payment and the payment in 2012 of 2011 premium rebate obligations, which were partially offset by increased net income.

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