UnitedHealth's 1Q profit climbs 13 percent

[April 21, 2011]  MINNETONKA, Minn. (AP) -- UnitedHealth Group Inc.'s first-quarter earnings rose 13 percent and trumped Wall Street expectations as the managed care company reversed last year's enrollment losses. It also raised its 2011 earnings forecast.

The insurer said Thursday that it earned $1.34 billion, or $1.22 per share, in the three months that ended March 31. That's up from $1.19 billion, or $1.03 per share, in the same quarter last year. Revenue rose 10 percent to $25.43 billion.

Analysts expected 89 cents per share on $24.97 billion in revenue.

UnitedHealth, based in Minnetonka, Minn., is the largest publicly traded health insurer based on total revenue and the second-largest based on enrollment, trailing only WellPoint Inc. It is the first big health insurer to release its quarterly earnings. Many analysts and investors see it as a bellwether for the sector.

The company now expects 2011 earnings per share to range between $3.95 and $4.05, a big increase from its previous forecast of $3.50 to $3.70. It also said revenue will approach $101 billion for the year, up from $100 billion.

Analysts have said the old outlook was conservative. They had expected earnings of $3.83 per share.

UnitedHealth said its commercial enrollment, which includes employer-sponsored group insurance and private individual coverage, climbed 4 percent to 25.6 million people. In last year's first quarter, it fell 4 percent.

Commercial insurance generally offers higher profit margins for insurers than government business like Medicaid or Medicare Advantage.

Health insurers struggled with losses in that business during the recession, as employers cut jobs and the number of people covered by insurance.

The insurer also saw an 8 percent first-quarter gain in its Medicare and Medicaid enrollment, to 8.4 million people.

[Associated Press]

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