UnitedHealth won’t seek federal aid because of outbreak
UnitedHealth Group is sticking to its profit outlook for the year and says it won’t seek any federal assistance to make it through a coronavirus outbreak that has hobbled much of the economy.
The coronavirus developed too late in the United States to have much of an impact on the Minnetonka-based insurance company’s first quarter. But it could hit the company from several angles.
UnitedHealth runs a health insurance business that covers nearly 49 million people, mostly in the United States.
Its Optum segment also runs one of the nation’s largest pharmacy benefit management operations as well as a growing number of clinics and urgent care and surgery centers.
Analysts expect those surgery centers to see a drop in business as patients cancel or postpone procedures they don’t need to have. That could help the insurance operation, depending on how much of those claims are merely pushed back to the second half of the year.
But the insurance side also could take a hit depending on how many people lose their health coverage during the wave of layoffs that have swept across the country.
UnitedHealth’s enrollment did slip more than 2 percent in the quarter, but company leaders had predicted that mostly due to a loss of some contracts.
The largest U.S. health insurer reported first-quarter net income of $3.38 billion, or $3.52 per share. Adjusted per share earnings were $3.72, easily beating Wall Street projections for $3.64, according to a survey of industry analysts by Zacks Investment Research.
Revenue was $64.42 billion.
UnitedHealth maintained per-share profit expectations for the year of between $16.25 and $16.55, the same forecast it laid out late last year.
Analysts expect earnings of $16.21 per share on about $260.84 billion in revenue, according to FactSet.
Many companies have withdrawn financial forecasts for the year because the pandemic has made most of them worthless. UnitedHealth said Wednesday that it will continue to evaluate the impact of the global pandemic on all of its businesses throughout the year.
Shares of UnitedHealth Group Inc., based in Minnetonka, Minnesota, are up almost 3% before the opening bell Wednesday.
The stock had climbed 18% in 2019, with the price reaching $300 for the first time in late December. It hit an all-time high price of $306.72 in February before shedding more than $100 in value over the next month as the broader market tanked.