This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Insurer UnitedHealth's 3Q Profit Jumps 23 Percent

TOM MURPHY

UnitedHealth Group's third-quarter net income jumped 23 percent, and the nation's largest health insurer raised its 2012 earnings forecast for the third time this year.

But company leaders also cautioned against thinking too positively about 2013. They said Tuesday that a stubbornly slow economy and the health care overhaul will combine to pressure the insurer's business again in the new year.

The Minnetonka, Minn., company now expects 2012 earnings of $5.20 to $5.25 per share, up from its previous forecast for $4.90 to $5 per share. Analysts expected $5.13 per share.

CEO Stephen J. Hemsley told analyst during a Tuesday conference call, the insurer expects growth in 2013 as well. But he said UnitedHealth must deal with tight government budgets that will squeeze its Medicare and Medicaid businesses and high unemployment rates that could hamper its private insurance enrollment.

The massive health care overhaul, which aims to cover millions of uninsured people, also will affect results next year. The law calls for a tax on premiums to start in 2014, but Hemsley said that will start to affect UnitedHealth's performance next year because the insurer will have to account for it in the rates it charges.

Insurers set their prices based on the claims or expenses they expect to have in future.

"We expect to grow revenues and earnings per share in 2013, but we view the current consensus level as a considerable challenge from this distance given these market conditions," he said.

Analysts expect, on average, earnings of $5.63 per share next year.

Hemsley also outlined concerns about the economy and employment levels last fall, as the insurer headed into 2012. UnitedHealth then went on to beat analyst expectations in every quarter so far this year. The CEO said Tuesday his company has successfully handled the broader market challenges it faces, but those obstacles still remain.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,928.20 -142.20 -0.79%
S&P 500 2,089.46 -25.03 -1.18%
NASDAQ 4,939.3270 -77.6020 -1.55%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs