Despite Topping Profit Expectations, UnitedHealth Underwhelms Some On Wall Street
The insurer lost customers from a core business: administering health coverage for large employers. CEO David Wichmann said that the company is not performing to its full potential and went on to tout digital health as a key part to its future success.
The Associated Press:
UnitedHealth Posts Big Profit Jump But Sees Room To Improve
UnitedHealth Group easily topped profit expectations during the second-quarter and hiked its outlook for the third time this year, but company shares were punished Tuesday for a performance that even company executives believe falls short of the health insurer's full potential. Enrollment jumped due partially to a surge in government-funded business, and operating earnings soared about 21 percent for the company's fast-growing Optum segment, which strays well beyond health insurance. (7/17)
The Star Tribune:
UnitedHealth Group Touts Digital Health Efforts As It Posts Earnings Gains
The new chief executive of UnitedHealth Group’s fast-growing Optum division told investors Tuesday that digital health is a key part of the company’s future as he touted a United-backed business that soon will open a new office in Minneapolis. For several years, UnitedHealth has been developing a digital health platform called Rally, which includes online and mobile tools that subscribers use to compare insurance benefit options, search for health care providers and participate in employer wellness programs. (Snowbeck, 7/17)
The Wall Street Journal:
UnitedHealth Raises Profit Outlook
Analysts said the earnings beat was fueled largely by non-operating factors, particularly a tax rate that was lower than some had estimated. The second quarter “seems mostly in-line with tax rate driving upside,” Wells Fargo analyst Peter Costa wrote in an investor note. During the earnings call, analysts zeroed in on the insurance arm’s medical loss ratio, which reflects the share of premiums that go toward health-care costs. The ratio was slightly worse than some analysts projected. (Chin and Wilde Mathews, 7/17)
Bloomberg:
UnitedHealth Falls After Quarter Only Delivers What Was Expected
UnitedHealth Group Inc. fell the most in more than five months after the health insurer’s results weren’t good enough to satisfy investors, despite beating analysts forecasts for second-quarter adjusted earnings and raising its full-year earnings projection. “We view the quarter as solid, but just meeting the bar for expectations and may underwhelm,” said Evercore ISI analyst Michael Newshel. (Tracer, 7/17)
