UnitedHealth raises 2021 profit forecast on Optum strength

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(C) Reuters. FILE PHOTO: The corporate logo of the UnitedHealth Group appears on the side of one of their office buildings in Santa Ana, California, U.S., April 13, 2020. REUTERS/Mike Blake

(Reuters) -UnitedHealth Group Inc on Thursday raised its full-year adjusted profit forecast after beating analysts’ estimates for third-quarter earnings, helped by a jump in revenue from its Optum unit that manages drug benefits.

The Optum business, which offers healthcare data analytics services, has been driving growth for the company when U.S. health insurers are wrestling with fluctuating medical costs since the coronavirus outbreak.

For the three months ended Sept. 30, UnitedHealth (NYSE:UNH) reported a medical loss ratio – the percentage of premiums paid for medical services – of 83.0%, worse than 81.9% a year earlier. Analysts had expected 83.5%.

A jump in infections in the country in July and August due to the fast-spreading Delta variant prompted hospitals in some states to again postpone non-urgent medical procedures, while COVID-19 cases and hospital admissions declined https://covid.cdc.gov/covid-data-tracker/#new-hospital-admissions in September.

Revenue from the Optum unit rose 13.9% to $39.8 billion. The segment has reported revenue growth for at least the last four consecutive quarters.

UnitedHealth’s core business that sells health insurance plans brought in $55.9 billion in sales, an 11% rise from a year earlier, buoyed by higher enrollment across health plans, including its Medicare Advantage plans for older Americans and the disabled.

Excluding items, the company reported earnings per share of $4.52, beating analysts’ estimate of $4.41, according to Refinitiv IBES data.

UnitedHealth raised its 2021 adjusted earnings per share forecast to a range of $18.65 to $18.90, from $18.30 to $18.80 earlier.

The company’s shares rose 2% in premarket trading.

UnitedHealth raises 2021 profit forecast on Optum strength

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