DOW JONES NEWSWIRES UnitedHealth Group Inc.'s (UNH) first-quarter earnings rose 3.1% as the health insurer continued to benefit from lighter use of benefits. UnitedHealth, the biggest managed-care company by revenue and membership, is the industry's first to report quarterly results, making its view of health-cost trends and patient traffic an important barometer. The company raised its full-year earnings estimate to $4.80 to $4.95 a share from its increased February forecast of $4.60 to $4.80 a share and backed its revenue guidance. UnitedHealth recently bought XLHealth Corp., a Medicare Advantage health-plan sponsor focused on people with special needs. Health insurers are clamoring to boost their presence in the market for senior-focused plans as Baby Boomers age. A report from the U.S. Department of Health and Human Services said enrollment in Medicare Advantage plans grew about 10% to 12.8 million in 2012 from a year earlier. Amid an uncertain U.S. economy, many consumers have been avoiding hospitals and doctors' offices in hopes of saving money, a trend that had lifted profits across the insurance sector as companies retain a greater portion of premiums. In the latest period, UnitedHealth's consolidated medical-care ratio, which reflects the portion of insurance premiums used for patient care, fell to 81% from 81.4% a year earlier. UnitedHealth reported a profit of $1.39 billion, or $1.31 a share, up from $1.35 billion, or $1.22 a share, a year earlier. Revenue jumped 7.3% to $27.3 billion. Analysts polled by Thomson Reuters had most recently forecast earnings of $1.17 a share on revenue of $27.2 billion. The company's UnitedHealthcare insurance business saw its revenue increase 6.9% to $25.5 billion. Revenue from Optum, its information- and technology-based health-services business, jumped 7.7% to $7.33 billion. Shares closed Wednesday at $57.32 and were inactive premarket. The stock has gained 9.6% over the past three months. -By Melodie Warner, Dow Jones Newswires; 212-416-2283; melodie.warner@dowjones.com
