UnitedHealth’s first-quarter profit jumped about 44%, and the nation’s largest health insurer also hiked its 2021 outlook despite expecting more hits from the COVID-19 pandemic.
The company said Thursday that the performance of its Optum division was particularly strong.
UnitedHealth raised its full year profit forecast to adjusted earnings of $18.10 to $18.60 per share, up from an outlook of $17.75 to $18.25 per share that it debuted in December.
The new range mostly tops the average analyst forecast of $18.19 per share, according to FactSet.
That projection includes a potential downside per-share of $1.80 from the on-going pandemic.
People began to return to doctors offices and scheduled more surgical procedures toward the end of last year after putting off medical care for months during the pandemic. That returned a bit of normality for UnitedHealth and other insurers.
The company also said COVID-19 testing and treatment activity was greater than expected during the quarter.
UnitedHealth brings in most of its revenue through its UnitedHealthcare insurance division, where enrollment grew by about a million people to nearly 49.5 million since the end of last year.
UnitedHealth also has been stoking its Optum segment for growth. That business runs one of the nation’s largest pharmacy benefit managers as well as a growing number of clinics and urgent care and surgery centers.
Optum’s operating earnings grew nearly 25%, to $2.6 billion during the quarter.
Overall, UnitedHealth Group Inc. posted quarterly earnings of $4.86 billion. That’s up from $3.38 billion in last year’s quarter even though the company’s largest expense, medical costs, grew almost 10% to $44.9 billion.
Earnings, adjusted for amortization costs, totaled $5.31 per share in the recently completed quarter, easily topping Wall Street’s per-share expectations of $4.42, according to a survey by Zacks Investment Research.
The Minnetonka, Minnesota, company also reported that its revenue grew 9% to $70.2 billion, and that too topped projections.
Shares are up slightly before the opening bell Thursday. The stock closed at $375.63 on Wednesday and has already climbed 7% so far this year.
That compares to a 10% advance by the Dow Jones industrial average, of which UnitedHealth is a component.
Follow Tom Murphy on Twitter: @thpmurphy
A portion of this story was generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNH at https://www.zacks.com/ap/UNH