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Insurance > Health Insurance
UnitedHealth reports 45.8 percent jump in quarterly earnings
JOSHUA FREED, AP Business Writer. Associated Press.
Copyright Associated Press
MINNEAPOLIS (AP) _ UnitedHealth Group, the nation's second- largest managed care company, reported Thursday that fourth-quarter earnings leapt 45.8 percent, capping a year in which it added six million new members.
Despite the earnings increase, UnitedHealth shares fell almost 3 percent in afternoon trading on the New York Stock Exchange.
The quarter "does complete a year that was excellent by virtually every measure, leaves considerable upside for the future, and provides us very strong momentum as we enter 2005," chairman and chief executive Dr. William McGuire told analysts.
Minnetonka-based UnitedHealth earned $739 million, or $1.09 a share. That beat by a penny the consensus of analysts surveyed by Thomson First Call, and was up from $507 million, or 83 cents per share, in the same period a year ago.
Revenues jumped 39.7 percent to $10.51 billion, from $7.52 billion at the same time a year ago.
UnitedHealth boosted its outlook for 2005, saying it now expects full-year earnings of $4.75 to $4.80. That's a nickel above its last guidance on Nov. 8. Analysts were expecting $4.76. First-quarter earnings were predicted at $1.12 per share.
UnitedHealth shares fell $1.65, or 1.9 percent, to close at $86.63 in Thursday trading on the New York Stock Exchange.
Piper Jaffray analyst Ryan Stewart said investors may be worried that increased competition will drive down profits following the December merger of Anthem Inc. and WellPoint Health Networks Inc., which displaced UnitedHealth as the largest managed care provider.
McGuire said UnitedHealth won't let competition dictate prices. UnitedHealth pricing "will reflect our costs, and no one else's," he said.
Stewart said UnitedHealth has moved beyond making money by managing or insuring health care, to streamlining the way businesses and doctors handle health information. That has let it grab business in markets such as Minnesota and some East Coast states that prohibit for-profit managed care companies, because UnitedHealth manages some of the functions of nonprofit providers.
"This is an information business," Stewart said.
UnitedHealth now covers 53.8 million people, either through medical insurance or through insurance programs it manages for other companies, the company said.
The company's largest division, health plan provider UnitedHealthCare, saw fourth-quarter revenues rise $2.3 billion, or 57 percent from the same period a year ago, to $6.4 billion. UnitedHealthCare added 245,000 consumers through internal growth and 2.4 million people by buying other insurance companies.
For all of 2004, UnitedHealth said it earned $2.59 billion, or $3.94 per share, a 41.7 percent increase over 2003 earnings of $1.83 billion, or $2.96 per share. Revenue for the year rose to $37.22 billion, up 29 percent from $28.82 billion the prior year.
Also Wednesday, the company announced a new job for former Northwest Airlines chief executive Richard Anderson, who joined UnitedHealth in November as a vice president without an assignment. Anderson will take over as chief executive of UnitedHealth's Ingenix division, which manages health care information for doctors and employers. He replaces Kevin Pearson, who is leaving for a three- year mission with the Mormon church. McGuire said Pearson planned to return to UnitedHealth after the mission ends.
On the Net: UnitedHealth Group: http://www.unitedhealthgroup.com/
Reproduced with permission of the copyright owner. Further reproduction or distribution is prohibited without permission.
Companies: UnitedHealth Group (NAICS: 524114, Sic:6324 )
Dateline: MINNEAPOLIS
Text Word Count 518
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