UnitedHealth Group kicked off the Q1 earnings season for the managed-care industry before Friday's open, topping estimates and raising 2023 earnings guidance. UNH stock, a Dow Jones component, fell in Friday's stock market action.
CEO Andrew Witty said in a statement that UnitedHealth enjoyed "strong, enterprise-wide growth this quarter." The company is winning by "offering more health services to more people and connecting consumers with greater access to high-quality, affordable care."
UnitedHealth Earnings
Estimates: Analysts expected UnitedHealth EPS to rise 12% to $6.16 on revenue growth of 12% to $89.77 billion.
Results: UnitedHealth's adjusted earnings rose 14% vs. a year earlier to $6.26 per share. Revenue grew 14.7% to $91.93 billion.
The medical cost ratio, paid benefits as a share of premiums, rose to 82.2% vs. 82% in the year-ago quarter.
UNH added 440,000 Medicare Advantage members and 190,000 Medicaid members. The company highlighted recent Medicaid contract wins in Indiana and Texas.
The Optum Health services unit continued to help drive earnings growth amid the expansion of its value-based care delivery initiatives, in which pay relates to performance, rather than being paid for each service. Optum Health revenue per consumer served increased 34% in Q1, after growing 29% in 2022.
Outlook: UNH raised full-year 2023 earnings guidance to a range of $24.50-$25 from $24.40-$24.90 per share. The analyst EPS consensus is $24.93, according to FactSet.
UNH Stock
In Friday stock market action, UnitedHealth stock fell 2.7% to 511.79, back below the 200-day average. UNH stock had been on a hot streak, rising for six straight sessions and making a run at a 558.20 buy point.
Through Thursday, UNH stock had rallied 11.35% in April, regaining its 200-day line last week for the first time all year. UNH stock had lost ground in each of the prior five months.
The recent rally has coincided with UNH stock rejoining IBD's Long-Term Leaders list. UNH stock is ranked No. 1 by IBD in the Medical-Managed Care group, according to IBD Stock Checkup.
Among other big managed-care plays, only Humana is also closing in on a buy point, while Elevance Health has reclaimed its 50- and 200-day moving averages.
