UnitedHealth Group (UNH) posted stronger-than-expected first quarter earnings Friday, with record overall revenues, thanks in part to double-digit gains from its Optum unit and improving costs in its insurance division.
UnitedHealth said adjusted profits for the three months ended in March came in at $6.26 a share, up 14% from the same period last year and 13 cents ahead of the Wall Street consensus forecast.
Group revenues, UnitedHealth said, rose 14.7% to $91.9 billion, again topping analysts' estimates of an $89.76 billion tally, while Optum revenue rose 25% to $54.1 billion. The group also added some 655,000 new Medicare Advantage members, as well as a further 570,000 Medicaid members over the three months ending in March.
UnitedHealth's medical cost ratio, meanwhile, was pegged 20 basis points higher at 82.2%, suggesting a modestly larger portion of its collected premiums were paid out on insurance claims. Overall premiums were up 13.6% to $72.786 billion while operating costs rose 19.5% to $13.625 billion.
“Our strong, enterprise-wide growth this quarter is a direct result of our colleagues’ unwavering commitment to offering more health services to more people and connecting consumers with greater access to high-quality, affordable care,” said CEO Andrew Witty.
UnitedHealth shares, a Dow component, were marked 0.05% lower in early Friday trading to change hands at $526.03 each, a move that would nudge the stock into negative territory for the year.
Earlier this year, UnitedHealth closed its $5.4 billion acquisition of home healthcare provider LHC Group, which it unveiled in March of 2022, amid a spate of deals by insurance groups into the direct care delivery market.
Democratic Senator Elizbeth Warren, in fact, called on the Federal Trade Commission to look into CVS Health's (CVS) planned $10 billion acquisition of primary care center operator Oak Street Health (OSH), as well as other completed transactions and to "challenge in court any mergers that have reduced competition in violation of antitrust laws".
"If the FTC determines that any of these deals violated antitrust law, I urge you to unravel them," the senator told the FTC in a letter published late last month.
