UnitedHealth Hedges 2011 Growth Prospects

UnitedHealth CEO Stephen J. Hemsley said healthcare reform and economic conditions will impact results in 2011.
By Maria Woehr ,

New York (

TheStreet

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UnitedHealth Group

(UNH) - Get Report

CEO Stephen Hemsley said that healthcare reform and economic conditions will impact results in 2011.

"The current economic recession has impacted growth results in 2010 and is expected to carry into 2011, as well," Hemsley said, according to a company presentation made during an investor conference in New York City on Monday. Hemsley added that trends that favored 2010 revenue growth are uncertain in 2011. "We will work to overcome and out perform these obstacles," he said.

UnitedHealth forecasts 2011 earnings of $3.50 to $3.70 per share, down from the 2010 projection of $3.85 to $3.95 per share. The insurer expects 2011 revenue of $99 billion-$100 billion, compared to a 2010 projection of about $94 billion.

Hemsley said that the changes that the company makes this year in the evolving healthcare environment should bring about, "meaningful organic earnings growth in 2012."

The health insurer expects a rise in medical enrollment and hopes to achieve an organic revenue growth rate of 6-9 percent in 2011. The company projects that its benefit plans -- excluding any acquisitions -- will increase by 830,000 members next year, to 33.64 million.

At the same time UnitedHealth Group plans cut run-rate operating costs by more than $1 billion, at a pace of about $200 million per year, by improving core operations and automating and integrating processes.

UnitedHealth says it will be considering opportune acquisitions in 2011.

"Acquisitions will continue to be an effective tool to achieve moreexpansive overall business diversification," Hemsley said.

--Written by Maria Woehr in New York.

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