Coverage: UnitedHealth gives bullish 2017 outlook

Shares of Minnesota-based UnitedHealth Group Inc., the largest health insurer in the United States, rose in aftermarket trading on Monday after the company gave investors a bullish outlook for its 2017 financial performance.

Tess Stynes of The Wall Street Journal has the news:

The company, which also affirmed its 2016 per-share earnings outlook, plans to provide more details Tuesday during the investor event.

For 2017, UnitedHealth said it was introducing guidance for adjusted per-share earnings of $9.30 to $9.60 and revenue of $197 billion to $199 billion. Analysts polled by Thomson Reuters had forecast per-share earnings of $9.14 and revenue of $196.6 million.

UnitedHealth last month had dropped hints of good news about its 2017 outlook, saying it would provide details during its investor day. In October the company said that it was “comfortable” with analysts’ 2017 earnings projections and that it could “potentially see” its per-share earnings view reflecting a modestly stronger growth outlook. The company also had said it would be aided by expected growth in its business and its planned exit from nearly all of its unprofitable Affordable Care Act plans.

Shares of the company rose 1.9% to $155 after hours.

An Associated Press story notes that UnitedHealth had confirmed analyst’s 2017 projections just one month earlier:

Last month, UnitedHealth executives said they were comfortable with Wall Street consensus forecasts for next year. Analysts then were projecting earnings of $9.12 per share, which implied 14 percent growth from the insurer’s forecast for this year.

UnitedHealth also said in October that it was hiking its adjusted earnings forecast for 2016 to about $8 per share, which was 7 cents better than the Wall Street consensus at the time.

The company said Thursday it still expects 2016 earnings per share of $8 on an adjusted basis on revenue of more than $184 billion. That compares with the average analyst estimate of $8.02 per share on revenue of $184.13 billion.

For next year, UnitedHealth forecast adjusted income of $9.30 to $9.60 per share on revenue of $197 billion to $199 billion. Analysts expect, on average, 2017 earnings of $9.15 per share on revenue of $196.86 billion from UnitedHealth, according to FactSet.

Shares of the company rose 2.2 percent in after-hours trading to $155.50. The stock has gained 20 percent in the past 12 months.

Jeff Hawkins of Investopedia.com notes the company’s stock price has been riding an investor wave:

Stocks for the Minnetonka, Minnesota-based health care company were listed at $152.32, a rise of 1.27 percent. Riding a recent wave of momentum, UnitedHealth was once more moving closer to surpassing its 52-week high mark, which at the time was $153.96. Eleven days ago, the trailing year high was $147.50.

Investors ignited the recent surge by favorably viewing UnitedHealth’s customer retention strategy and the release of last month’s third-quarter results. UnitedHealth’s Q3 was highlighted by a 12-percent increase in revenue ($46.3 billion) and a 23­-percent improvement in adjusted earnings per share ($2.17 percent), Zacks reported.

UnitedHealth, which had a market valuation of $144.98 billion, offers two primary business lines, health care benefits services and coverage and health services information technology.

In a regional move to help satisfy state regulators, UnitedHealthcare Community Plan of Rhode Island collaborated with CharterCARE Health Partners and CharterCARE Provider Group RI to launch a Medicaid accountable care program, a release stated last week.

Read more: UnitedHealth Rides Investor Confidence Wave (UNH) | Investopedia http://www.investopedia.com/news/unitedhealth-rides-investor-confidence-wave-unh/#ixzz4RMNXVPHi
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