By Kimberly Chin and Anna Wilde Mathews 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (July 18, 2018).

UnitedHealth Group Inc. on Tuesday raised its full-year earnings outlook as the company continued to see growth in health plan membership and premiums.

The parent of the nation's largest health insurer earned $2.92 billion, or $2.98 a share, in the second quarter, up from $2.28 billion, or $2.32 a share, in the year-earlier period. On an adjusted basis, UnitedHealth's profit rose to $3.14 a share. Analyst polled by Thomson Reuters were expecting $3.04 a share.

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.

UnitedHealth said the result met its expectations, and it hadn't changed its full-year projection. The company did flag an uptick in health-care utilization in its Medicare business, but said this was expected and not a change from last year. The uptick is tied to rapid enrollment growth, UnitedHealth said.

Overall, revenue rose 12% to $56.1 billion, boosted by membership growth in its health-insurance arm, as well as continued expansion in its Optum health-services segments. Analysts were expecting revenue of $56 billion. Revenue from its UnitedHealthcare segment rose 12% to $45.8 billion.

This year UnitedHealth guided adjusted per-share earnings between $12.50 and $12.75, up from its prior forecast between $12.40 and $12.65.

Shares of UnitedHealth fell 3.4% in morning trading.

Corrections & Amplifications UnitedHealth Group profits beat analysts' estimates by 10 cents a share. An earlier version of this article incorrectly stated that profits were in line with estimates. (July 17)

Write to Anna Wilde Mathews at anna.mathews@wsj.com

 

(END) Dow Jones Newswires

July 18, 2018 02:47 ET (06:47 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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