UnitedHealth Group Inc. (UNH) on Tuesday reported higher third-quarter earnings, despite dwindling commercial enrollment in employer-sponsored health plans as U.S. jobs cuts mounted. The nation's largest health insurer reported it earned $1.04 billion, up 13 percent from $920 million a year ago.
On a per-share basis, the Minnetonka, Minn.-based company earned 89 cents a share, compared to 75 cents a share a year ago. UnitedHealth had been expected to report third-quarter earnings of 76 cents a share, according to a consensus estimate of 19 analysts polled by Zacks.com. The company is the first of the nation's large health insurers to report earnings.
Total revenues rose to $21.7 billion in the three months ending Sept. 30, up from $20.2 billion during the same period a year ago. UnitedHealth said the earnings jump was aided by overall cost containment and a business model that is helping the company weather a bad economy.
Commercial enrollment fell more than 6 percent, to 24.8 million, as job losses escalated, sending revenues within the UnitedHealthcare division down 3 percent to $10.1 billion, UnitedHealth said. The latest decline followed a similar enrollment drop in the second quarter.
Revenues at the company's Ovations unit, which supplies services to patients over 50, rose 19 percent to $7.9 billion. Within the company's AmeriChoice division, which provides health benefits and services to Medicaid recipients, revenue rose 29 percent to $2.1 billion.
Total enrollment in the company's public and senior plans rose to 7.2 million from 6.3 million, UnitedHealthcare said.
UnitedHealth confirmed full-year earnings of $3.15 a share and anticipates cash flows of $5 billion from operations. Zacks.com expects the company to earn $3.09 a share in 2009, based on a consensus estimate of 23 analysts polled.
Shares of the company were higher in pre-market trading Tuesday ahead of the opening bell on Wall Street, climbing 5.5 percent to $26.30 a share.
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