UnitedHealth ( UNH) is ready to flex its muscles. The company is poised to take center stage -- and pump out another record quarter -- when it kicks off earnings season for the managed care group on Thursday. Following a string of acquisitions, the company should see quarterly revenue power through the $10 billion mark for the first time ever. Meanwhile, it is set to deliver record profits for the 25th quarter in a row. Morgan Stanley analyst Christine Arnold predicted last week that UnitedHealth would be "ending the year with a bang." By now, the company has been a longtime favorite on Wall Street. It regularly posts bulging, double-digit profit growth that blows past expectations. As a result, analysts are banking on another strong performance from the company this time around. "It is difficult to envision weakness in the quarter," wrote Joshua Raskin of Lehman Brothers, "though we note that the company has historically shown less upside to earnings in the fourth quarter compared to the remainder of the year." Last quarter, UnitedHealth beat the consensus estimate by 4 cents with profits of $1.04 a share. Raskin expects the company to post fourth-quarter profits of $1.08 a share, up 29% from a year ago, and at least match expectations in the process. Still, he says his latest forecast -- upped by a penny on Monday -- could be as much as 3 cents too low. Shares of UnitedHealth slipped 43 cents to $89.13 on Tuesday, despite a recent flurry of upbeat reports.
Raskin raises only two potential concerns in his latest research. He notes that UnitedHealth's top two executives cashed in more than $170 million worth of stock options during the fourth quarter. He also highlights a new regulatory risk. "Prosecutors are investigating the company's relationship with Medco ( MHS) over alleged kickbacks," Raskin explains. ( TheStreet.com reported on the probes in an article last month.) But "UnitedHealth Group said the company's contract with Medco was the result of 'good-faith, arms-length and often hard-fought negotiations.'"