UnitedHealth Group (NYSE:UNH), the largest U.S. health insurer, boosted its full-year forecast after saying that profit gained in the second quarter, helped by its booming Optum technology and services unit.
The Minnetonka, Minnesota-based company raised its profit forecast for the full year to $6.25-$6.35 per share from $6.15-$6.30 on revenue of about $154 billion.
Analysts on average expect a full-year profit of $6.26 per share on revenue for $143.61 billion, according to Capital IQ.
The company benefitted from continued momentum in its health-services business as well as increased membership in its insurance operations. The company’s key medical-cost ratio was higher than some analysts expected, but UnitedHealth said “trends remained controlled and consistent with management expectations.”
UnitedHealth said its increased guidance reflects its $12.8 billion deal to buy pharmacy-benefit manager Catamaran, expected to close in July, and its strong business performance.
UnitedHealth's revenue grew 11 percent to $36.26 billion for the June quarter, helped by its Optum business, which includes its technology and pharmacy benefit management businesses. Optum saw revenue grow 16 percent to $13.6 billion.
Net income rose to $1.59 billion, or $1.64 per share, in the April-to-June period, from $1.41 billion, or $1.42 per share, a year earlier. Analysts on average had expected a profit of $1.58 per share on revenue of $35.85 billion, according to Capital IQ.
UnitedHealth said its medical-care ratio, a key industry metric that reflects the portion of insurance premiums used for patient care, ticked down 0.2 percentage points to 81.4% from a year earlier.
Shares were down 2.4 percent at $122.89 at 10:22 a.m. in New York, paring this year’s gain to 21 percent.