What was the primary driver of revenue growth in the third quarter of 2009?

The primary driver of revenue growth was the increase in premium revenues within the Health Care Services reporting segment. This growth was supported by strong organic expansion in public and senior markets, along with necessary premium rate adjustments to reflect rising medical costs.

How did the economic recession affect UnitedHealth Group's performance?

The economic recession led to a decrease in commercial membership due to rising unemployment, which put pressure on top-line growth for UnitedHealthcare and OptumHealth. However, the company's AmeriChoice business saw increased participation in its Medicaid offerings as employment rates fell, partially offsetting these effects. The company also noted that lower interest rates due to recessionary conditions impacted investment income.

What is the company's outlook on proposed health care reforms?

The company acknowledged ongoing discussions and proposals for significant changes to the U.S. healthcare system at both national and state levels. It noted that the final impact of these reforms remains uncertain, but they could potentially increase costs, expand liability, and necessitate changes to business operations or result in business loss. Specific concerns were raised regarding potential reductions in payments to private Medicare Advantage plans.

How did the company manage its medical costs?

Medical costs increased primarily due to growth in public and senior markets, elevated costs from the H1N1 influenza virus, general medical cost inflation, and increased utilization of services. These increases were partially offset by net favorable development in prior period medical costs. The company's medical care ratio saw a slight increase to 82.0% for the quarter, but remained stable for the nine-month period at 82.7%.

UNH 10-Q Quarterly Report Q3 FY2009 — Revenue, Net Income, EPS

Summary

UnitedHealth Group (UNH) reported solid financial performance for the third quarter and nine months ended September 30, 2009. The company demonstrated revenue growth driven by its Health Care Services segment, particularly in public and senior markets, alongside premium rate increases. Despite challenges from the economic recession impacting commercial membership, UNH saw significant growth in its Medicare Advantage, Medicaid, and Medicare Supplement offerings. The company also managed its operating costs effectively, with a slight increase in medical costs largely attributable to H1N1 and utilization, partially offset by favorable prior period developments. Strong earnings growth was also seen in the Prescription Solutions segment. The company maintained a strong liquidity position and continued its share repurchase program, signaling confidence in its financial health and future prospects.

Financial Highlights

53 data points

Beta

Revenue

$21.70B

1.0% Gross Margin

Net Income

$1.03B

0.0% Net Margin

EPS (Diluted)

$0.89

Total Assets

$57.45B

Cash & Equivalents

$9.54B

Free Cash Flow

$2.57B

Financial Statements

Beta

Revenue	$21.70B
Cost of Revenue	$442.00M
Gross Profit	$21.25B
SG&A Expenses	$3.16B
Operating Expenses	$20.02B
Operating Income	$1.68B
Interest Expense	$137.00M
Net Income	$1.03B
EPS (Basic)	$0.90
EPS (Diluted)	$0.89
Shares Outstanding (Basic)	1.15B
Shares Outstanding (Diluted)	1.16B

Key Highlights

1Total revenues increased by 8% to $21.7 billion for the quarter and 8% to $65.4 billion for the nine months, driven by premium revenues in Health Care Services.
2Net earnings saw a substantial increase of 13% to $1.04 billion for the quarter and 28% to $2.88 billion for the nine months.
3Diluted earnings per share grew by 19% to $0.89 for the quarter and 35% to $2.43 for the nine months.
4Health Care Services segment revenue grew 7% for the quarter and 8% for the nine months, bolstered by Medicare Advantage and Medicaid participation.
5Prescription Solutions segment revenues increased significantly by 16% for the quarter and 13% for the nine months, driven by prescription volume growth and improved drug purchasing.
6Operating costs were managed effectively, with operating costs decreasing by 3% for the nine months year-over-year, partly due to the absence of significant litigation settlement expenses incurred in the prior year.
7The company maintained a strong liquidity position, with cash and cash equivalents and investments totaling $23.7 billion as of September 30, 2009.

UNITEDHEALTH GROUP INC Quarterly Report for Q3 Ended Sep 30, 2009

Summary

Financial Highlights

Key Highlights

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