UnitedHealth (UNH) Beats on Q4 Earnings Excluding Tax Impact

Zacks Equity Research
Updated


Have you been eager to see how UnitedHealth Group Inc. UNH performed in Q4 in comparison with the market expectations? Let’s quickly scan through the key facts from this Minnetonka-based major health insurer’s earnings release this morning:

An Earnings Beat

UnitedHealth came out with earnings of $2.59 per share, which beat the Zacks Consensus Estimate of $2.50. Earnings also rose 22.7% year over year.

Improved revenues and higher enrollment primarily drove earnings beat.

Earnings Surprise History

UnitedHealth has an impressive earnings surprise history. Before posting the earnings beat in Q4, the company delivered positive surprises in all prior four quarters, as shown in the chart below:

UnitedHealth Group Incorporated Price and EPS Surprise

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

Overall, the company has a positive earnings surprise of 4.4% in the trailing four quarters.

Revenue Higher Than Expected

UnitedHealth recorded revenues of $52.1 billion, which surpassed the Zacks Consensus Estimate of $51.5 billion. Also, it compared favorably with the year-ago number of $47.5 billion.

Key Stats for Q4:

  • Total operating cost of $48.1 billion increased 8.4% year over year.

  • Net margin of 6.9% increased from 3.5% in the year ago quarter.

  • The company medical enrollment grew to 49.5 million from 48.9 million in the year ago quarter.

Guidance Update

UnitedHealth revised its 2018 financial outlook to reflect the effects of the U.S. corporate tax law changes. It now expects 2018 net earnings of $11.65 to $11.95 per share and adjusted net earnings of $12.30 to $12.60 per share. Cash flows from operations are expected to range from $15 billion to $15.5 billion.

What Zacks Rank Says

UnitedHealth carries a Zacks Rank #3 (Hold). However, since the latest earnings performance is yet to be reflected in the estimate revisions, the rank is subject to change. While things apparently look favorable, it all depends on what sense the just-released report makes to the analysts.

(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!

Today's Stocks from Zacks' Hottest Strategies

It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.

And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.

See Them Free>>


 


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
UnitedHealth Group Incorporated (UNH) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research