UnitedHealth Radiates a Healthy Glow

Despite a decrease in commercial enrollment as companies lay off employees and trim benefits, UnitedHealth ( UNH) more than doubled its profit in the second quarter.

Expecting an even healthier future, the company raised the low end of its full-year guidance.

During the quarter, the company earned $859 million, or 73 cents a share, compared with $337 million, or 27 cents in the year-ago period. Analysts expected a profit of 70 cents a share.

Last year's results were weighed down by two lawsuit settlements, which resulted in a charge of $922 million, or 47 cents a share.

Revenue rose 7% to $21.66 billion from $20.27 billion on increased premiums, while investment income fell 36% to $153 million, which reduced earnings by 5 cents per share. But the uptick was due in part to price increases.

UnitedHealth's commercial health insurance enrollment fell 6% to 25 million in the second quarter, and its total enrollment, which includes government plans like Medicaid and Medicare, fell 2% to 32.1 million.

Looking forward, the company sees full-year earnings in the range of $3 to $3.15 per share, up from its previous guidance of $2.90 to $3.15 a share.

On Monday, UnitedHealth said that it will pay about $510 million to buy rival Health Net, which includes 578,000 members in Connecticut, New York and New Jersey and is expected to generate 2009 revenue of about $2.7 billion. The transaction is expected to close within a year.

Shares of the company were up 3% to $25.65 in morning trading.

Copyright 2009 TheStreet.com Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.

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