What To Expect From UnitedHealth’s Q4 Earnings

UnitedHealth (NYSE:UNH), the largest health insurer in the U.S., is scheduled to announce its fourth quarter earnings on Tuesday, January 17. In the first nine months of 2016, UnitedHealth reported robust earnings with revenues growing 21% year-over-year (y-o-y) to over $137 billion and operating income rising by 14% y-o-y to $9.7 billion. This was largely driven by solid performance of the company’s pharmacy services business, Optum. In terms of earnings, the company’s adjusted earnings grew about 18% to $5.94 per share.

We expect the company’s Optum division to carry the growth momentum forward, taking advantage of inter-division integration at UnitedHealth that allows Optum to offer services to customers of the company’s health insurance businesses. The company is expected to report revenues of $46.9 billion and earnings of about $2.07 per share in the upcoming Q4 results, per consensus estimates compiled by Reuters. Buoyed by the overall strong quarterly results in the first three quarters of 2016, the company slightly raised its guidance for full year 2016 and now expects to generate adjusted earnings of $8.00 compared to its earlier guidance of $7.80 to $7.95. Its guidance for consolidated revenue in full year 2016 remains the same at $182 billion.

First Three Quarters Performance Recap

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