Summary
UnitedHealth Group (UNH) reported its first quarter 2013 financial results, showing a notable increase in total revenues to $30.34 billion, up 11% year-over-year, primarily driven by acquisitions and growth in its Optum platform. Despite revenue growth, net earnings attributable to common shareholders declined by 14% to $1.19 billion, or $1.16 per diluted share, compared to $1.39 billion, or $1.31 per diluted share, in the prior year's quarter. This decrease was influenced by a higher medical care ratio (82.7% vs. 81.0%) due to lower favorable development in medical cost reserves and a shift in Medicare Part D plan timing. The company's operational performance saw a dip in earnings from operations by 8% to $2.14 billion, with UnitedHealthcare experiencing a 20% decrease while Optum delivered strong 96% growth. Key strategic moves during the quarter included the acquisition of a larger stake in Amil Participações S.A. in Brazil, indicating continued international expansion. Management highlighted ongoing pressures in government program reimbursement rates, particularly for Medicare Advantage, and the anticipated impact of the Affordable Care Act's industry tax starting in 2014. The company maintained compliance with debt covenants and continued its share repurchase program.
Financial Highlights
55 data points| Revenue | $30.34B |
| Cost of Revenue | $682.00M |
| Gross Profit | $29.66B |
| SG&A Expenses | $4.61B |
| Operating Expenses | $28.20B |
| Operating Income | $2.14B |
| Interest Expense | $178.00M |
| Net Income | $1.19B |
| EPS (Basic) | $1.17 |
| EPS (Diluted) | $1.16 |
| Shares Outstanding (Basic) | 1.02B |
| Shares Outstanding (Diluted) | 1.03B |
Key Highlights
- 1Total revenues increased by 11% to $30.34 billion, driven by acquisitions (notably Amil in Brazil) and growth in Optum services.
- 2Net earnings attributable to common shareholders decreased by 14% to $1.19 billion ($1.16 per diluted share), impacted by an increase in the medical care ratio.
- 3The medical care ratio rose to 82.7% from 81.0% in the prior year's quarter, primarily due to lower favorable reserve development and Medicare Part D timing shifts.
- 4Earnings from operations declined by 8% to $2.14 billion, with UnitedHealthcare's earnings falling 20% while Optum's earnings surged 96%.
- 5UnitedHealthcare saw significant membership growth (6.4 million people), largely due to the Amil acquisition, but commercial risk-based membership decreased by 13%.
- 6The company repurchased $543 million of its common stock during the quarter, as part of its ongoing share repurchase program.
- 7As of March 31, 2013, the company held $10.0 billion in cash and cash equivalents, with $3.0 billion available for general corporate use.