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Omar Venerio
Omar Venerio
Articles (1722) 

Wednesday Morning Market Highlights

Markets up, shares of UnitedHealth fall on earnings

US Markets

U.S. stocks were in the green on Wednesday morning. The producer price index climbed a seasonally adjusted 0.4% in September, according to the Labor Department, topping analyst estimates. The Dow advanced more than 28 points, or 0.08%, to 28,703, while the S&P 500 index rose 0.25% to 3,520 and the Nasdaq Composite Index was up 0.44%, to 11,915.

Gainers

Losers

Global Markets

The main European stock markets traded in the green. The UK's FTSE 100 fell 0.40%, France's CAC 40 rose 0.04%, Germany's Dax was up 0.13% and Spain's Ibex 35 advanced 0.94%.

In Asia, Japan's Nikkei 225 gained 0.11%, India's BSE Sensex advanced 0.42%, Hong Kong's Hang Seng jumped 0.07% and China's Shanghai Composite was down 0.56%.

UnitedHealth releases earnings report

Shares of UnitedHealth Group Incorporated (NYSE:UNH) fell 4.5% on Tuesday morning after the company announced financial results for its third quarter of fiscal 2020. It posted earnings per share of $3.15, beating analysts' estimates by 43 cents. Revenue of $65.12 billion grew 7.9% year-over-year and beat expectations by $1.15 billion.

In the quarter, the earnings from operations reached $4.7 billion, lower than $5.0 billion in last year's comparable period. The decline was fueled by the extensive consumer and customer financial assistance measures and pandemic- related care and testing costs.

Moreover, the medical care ratio was 81.9% compared to 82.4% in the same period of last year, driven by lower care patterns and the return of the health insurance tax. However, the operating cost ratio was 15.6%, higher than the 14.8% in the same quarter of the prior year, impacted by health insurance tax and business mix.

Looking at cash generation, cash flow from operations were $3.1 billion in the third quarter, impacted by fiscal issues from second to the third quarter.

At the end of June, Ken Fisher (Trades, Portfolio) boosted his holding in the stock to 2,347,070 shares. Barrow, Hanley, Mewhinney & Strauss cut its investments by 25% to 1,670,085 shares and Chris Davis (Trades, Portfolio) reduced his investment by 7% to 201,279 shares.

Disclosure: The author holds no positions in any stocks mentioned.

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About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor and Area Head of Finance. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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