01—Abstract
Summary
Summary of the 10-K filed February 12, 2019. Cited figures are marked; the original filing is the authoritative source.
UnitedHealth Group Inc. reported strong performance in its 2018 fiscal year, demonstrating significant revenue growth driven by its UnitedHealthcare and Optum segments.
The company's diversified business model, encompassing health benefits and health services, continues to yield positive financial results. Key financial highlights include substantial revenue increases and robust earnings from operations, reflecting effective cost management and a growing customer base.
The company's strategic focus on leveraging data and technology, coupled with clinical expertise across its platforms, positions it well for continued expansion and market leadership. Investors can look to UnitedHealth Group's consistent financial performance and its strategic initiatives as indicators of its ongoing strength and future growth potential.
02—Key points
Key Highlights
- Consolidated revenues increased by 12% to $226.2 billion in 2018.
- Earnings from operations grew by 14% to $17.3 billion.
- Diluted earnings per share increased by 14% to $12.19.
- UnitedHealthcare revenues grew 12%, driven by Medicare & Retirement and Community & State segments.
- Optum revenues increased by 11%, with strong performance across OptumHealth, OptumInsight, and OptumRx.
- Cash flows from operations increased by 16% to $15.7 billion.
- The company returned capital to shareholders through dividends and share repurchases, increasing the annual dividend to $3.60 per share.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2018, UnitedHealth Group Inc kept $0.05.
- Revenue$226.25B100.0%
- Cost of revenue−$27.00B11.9%
- Gross profit$199.25B88.1%
- Operating costs−$181.91B80.4%
- Operating income$17.34B7.7%
- Interest, other & tax−$5.36B2.4%
- Net income$11.99B5.3%
Where FY2018 revenue went
$226.25B- Other operating costs: $147.83B, 65% of revenue
- SG&A: $34.07B, 15% of revenue
- Net income: $11.99B, 5.3% of revenue
- Cost of revenue: $27.00B, 12% of revenue
- Interest, other & tax: $5.36B, 2.4% of revenue
Kept 5.3% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 12, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $226.25B$201.16B | +12.5% |
| Cost of Revenue | $27.00B$24.11B | +12.0% |
| Gross Profit | $199.25B$177.05B | +12.5% |
| SG&A Expenses | $34.07B$29.56B | +15.3% |
| Operating Expenses | $208.90B$185.95B | +12.3% |
| Operating Income | $17.34B$15.21B | +14.0% |
| Interest Expense | $1.40B$1.19B | +18.0% |
| Net Income | $11.99B$10.56B | +13.5% |
| EPS (Basic) | $12.45$10.95 | +13.7% |
| EPS (Diluted) | $12.19$10.72 | +13.7% |
| Shares Outstanding (Basic) | 963.00M964.00M | −0.1% |
| Shares Outstanding (Diluted) | 983.00M985.00M | −0.2% |
05—Questions
Frequently Asked Questions
What were the main drivers of revenue growth for UnitedHealth Group in 2018?
Revenue growth was primarily driven by an increase in the number of individuals served across UnitedHealthcare's risk-based businesses, favorable pricing trends influenced by the Health Insurance Industry Tax, and broad growth across the Optum business segments, particularly in care delivery, pharmacy services, and advisory services.
How did the Optum segment perform in 2018?
The Optum segment delivered strong results with an 11% revenue increase. OptumHealth saw growth in care delivery and behavioral health, OptumInsight benefited from increased demand for data analytics and advisory services, and OptumRx experienced growth in specialty pharmacy and home delivery services.
What is the company's strategy for managing medical costs?
UnitedHealth Group manages medical costs through a combination of underwriting criteria, product design, negotiation of favorable provider contracts, and comprehensive care management programs. They also leverage Optum's capabilities to coordinate patient care and improve affordability.
How does UnitedHealth Group return capital to shareholders?
The company returned capital to shareholders through dividends and share repurchases. In June 2018, the annual cash dividend rate was increased to $3.60 per share. UnitedHealth Group also actively repurchases its common stock under an ongoing share repurchase program.
06—Continue