UNH UnitedHealth Group Inc

By Dave Sebastian

UnitedHealth Group Inc. said profit fell as expenses rose for the first quarter, which saw the coronavirus pandemic rapidly progressing in the U.S. later in the period, though revenue grew.

Earnings were $3.38 billion, or $3.52 a share, compared with $3.47 billion, or $3.56 a share, in the same period last year. Adjusted earnings were $3.72 a share.

Analysts polled by FactSet were looking for earnings of $3.44 a share, or $3.63 a share on an adjusted basis.

The parent of the nation's largest health insurer posted sales of $64.42 billion, up 6.8% from the comparable quarter last year. Analysts were expecting $64.12 billion.

The medical loss ratio -- the percentage of premium revenue spent on health care -- at its insurance unit was 81%, lower than the 82% analysts had expected.

The company's UnitedHealthcare unit recorded revenue of $51.1 billion, up 4.4% from the year-ago period due to growth in Medicare Advantage and dual special-needs plans. The number of people with commercial benefits fell 475,000 from the prior year, while those served under Medical Advantage grew 410,000.

Operating costs rose to $59.43 billion from $55.48 billion.

UnitedHealthcare has also waived cost-sharing for Covid-19 testing and related visits and said it would ease some administrative rules to give patients more access to care during the pandemic.

Sales for its Optum health-services business grew 24.6% to $32.8 billion.

The company last week said it is accelerating payments to doctors and hospitals, starting with about $2 billion, to ease a cash crunch that has resulted in health-care providers furloughing workers. UnitedHealth also said it has provided early refills, prolonged authorizations and increased home-delivery options to ensure no shortages.

UnitedHealth affirmed 2020 guidance forecasting adjusted earnings of between $16.25 and $16.55 a share.

Also on Wednesday, the company said Andrew Witty, UnitedHealth's president and the chief executive of Optum, will take a leave of absence to assist with the World Health Organization's Covid-19 vaccine efforts.

Write to Dave Sebastian at dave.sebastian@wsj.com

(END) Dow Jones Newswires

April 15, 2020 06:46 ET (10:46 GMT)

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