UnitedHealth (UNH) Stock Stood Stable After Meeting Q4 Expectations

UnitedHealth Group Incorporated (UNH), while keeping its December outlook for the full year 2021, posted stronger fourth-quarter performance than analysts predicted.


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In the fourth quarter ended December 31, UnitedHealth Group (UNH) announced a rise in revenues, but a drop in income relative to the previous quarters. Earnings per share for the fourth quarter dropped 35% to $2.52 but were $0.12 higher than the forecast of analysts of $2.40. Revenue rose 8 percent to $65.5 billion, also above the average $65.14 billion Wall Street estimate.

The Optum division of UnitedHealth reported solid sales growth of 21 percent, delivering the highest profit margin for the group. In the healthcare sector, Optum delivers data analytics, productivity growth, total cost savings, and enhancement of customer experience.

The $13 billion purchase of Change Healthcare by UnitedHealth (held in early January) could further boost the capabilities of Optum’s data analytics services. Assuming that the transaction completes in the second half of 2021, UnitedHealth expects the merger to add around $470 million to its earnings for 2022, as expected.

The largest U.S. insurance provider said its profits were influenced by a recovery in American demand for medical care and rising expenses associated with its programs to make patients more open to Covid-19 testing and treatment. The insurance provider may face a rise in referrals after the pandemic, provided that many clinic visits are already postponed due to the coronavirus pandemic.

In the United States, the closure of a vast number of jobs is now reducing the number of insurance providers, which also impacts the revenue and earnings of insurance firms. The UnitedHealth Group has maintained its estimate of fiscal 2021 earnings per share in the range of $17.75-$18.25, which involves a $1.80 reduction attributed to Covid-19 associated care and research expenses. At the same time, the expected range’s average valuation is marginally smaller than the forecast of $18.18 by analysts.

UnitedHealth Group Incorporated (UNH) was almost stable (-0.38%) to end the Wednesday session at $350.84.

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