Dow Jones News: UnitedHealth Boosts Profits; Apple Price Target Raised on 5G Optimism

With the first phase of a trade deal between the U.S. and China set to be signed today, the Dow Jones Industrial Average (DJINDICES:^DJI) reacted by rising sharply. The Dow was up 0.5% at 11:20 a.m. EST.

Contributing to that gain was UnitedHealth Group (NYSE:UNH), which reported strong earnings growth that beat analyst expectations. Shares of Apple (NASDAQ:AAPL) were also on the rise following a price target increase from an analyst optimistic about the tech giant’s growth prospects.

Profits improve for UnitedHealth

Health insurance giant UnitedHealth reported mixed fourth-quarter results Wednesday morning, with revenue coming in short of analyst expectations. But an earnings beat driven by improving margins was enough good news to drive the stock 2.4% higher in morning trading.

Image source: UnitedHealth.

UnitedHealth reported fourth-quarter revenue of $60.9 billion, up 4.2% year over year but $270 million below the average analyst estimate. The UnitedHealthcare business generated revenue of $48.2 billion, up 4.3%, while the Optum health services business generated revenue of $29.8 billion, up 8%.

Non-GAAP (adjusted) earnings per share came in at $3.90, up from $3.28 in the prior-year period and $0.12 higher than analysts were expecting. Operating margin in both segments improved. UnitedHealthcare registered an operating margin of 4.3%, up 40 basis points year over year, while Optum boosted its operating margin by 30 basis points to 10.1%.

On top of reporting earnings growth, UnitedHealth reiterated its previously issued guidance for 2020. The company expects GAAP earnings per share between $15.45 and $15.75, along with non-GAAP earnings per share between $16.25 and $16.55.

Shares of UnitedHealth spent much of 2019 in the doldrums, but began to recover sharply toward the end of the year. The healthcare stock is now up more than 33% over the past three months.

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