UnitedHealth Group beat first-quarter expectations and raised its 2019 forecast, as the nation’s largest insurer increased Medicare coverage and received another boost from its growing business outside health insurance.
The performance softened, at least temporarily, an unusual stock price slump so far this year.
UnitedHealth said Tuesday that revenue from its Medicare and retirement business jumped nearly 12%, as Medicare Advantage enrollment grew by around 400,000 people. UnitedHealth is the nation’s largest provider of Medicare Advantage plans, which are privately run versions of the federally funded Medicare coverage program for people over age 65.
UnitedHealth Group, based in Minnetonka, Minn., also saw revenue grow nearly 12% to $26.4 billion from its Optum segment, which runs a pharmacy benefit management business, manages physician clinics and provides technology services.
UnitedHealth covers nearly 50 million people internationally as the largest U.S. health insurer, but it also has been stoking growth in its Optum segment for several years now. Health insurance is still the biggest revenue generator for UnitedHealth, but Optum, which generated first-quarter operating earnings of $1.9 billion, generally delivers a higher profit margin.
UnitedHealth has been feeding Optum with acquisitions as insurers and other health care entities push deeper into managing or providing patient care in order to cut costs and improve quality.
Overall, UnitedHealth earnings jumped 22% to $3.47 billion in the first quarter. Earnings, adjusted for amortization costs, were $3.73 per share, topping Wall Street estimates by 13 cents, according to a survey by Zacks Investment Research.
Total revenue climbed about 9% to $60.31 billion, also edging out expectations.
UnitedHealth now expects 2019 adjusted earnings to range between $14.50 and $14.75 per share after reaffirming in January a forecast for $14.40 to $14.70 per share.
Analysts expect, on average, earnings of $14.65 per share, according to FactSet.