UnitedHealth chased a 35 percent profit hike in last year’s first quarter with a 31 percent jump in the first three months of 2018 by adding customers and improving its growing operations outside insurance.
The nation’s largest health insurer also boosted its forecast for 2018 after a surprisingly strong start to the year.
The company said Tuesday that it added customers for its Medicare Advantage and Medicaid businesses and stretched its reach into South America by buying a health care provider and insurer that operates in Chile, Columbia and Peru.
The insurer also saw its provision for income taxes shrink 15 percent to $800 million due partly to a lower federal tax rate.
UnitedHealth also booked $1.7 billion in operating earnings, or a 29 percent gain, for its Optum business segment.
Health insurance is still the biggest revenue generator for UnitedHealth, which covers nearly 49 million people. But it also has been focused on growing Optum, which provides pharmacy benefits management and technology services. It operates an expanding number of clinics and urgent care and surgery centers.
UnitedHealth Group Inc. earned $2.84 billion in the first quarter, up from $2.17 billion last year, while adjusted earnings per share totaled $3.04. Total revenue jumped 13 percent to $55.19 billion.
Analysts expected earnings of $2.92 per share on $54.86 billion, according to Zacks Investment Research.
The Minnetonka, Minnesota, company now forecasts 2018 earnings to range between $12.40 and $12.65 per share, up from a prediction it made in January for earnings of $12.30 to $12.60 per share. Analysts have been projecting earnings of $12.54 per share, according to FactSet.
Shares rose more than 2 percent to $236 before the opening bell. The stock had topped $250 in late January to set another a new all-time high price before retreating. Even with the late-winter pull back, company shares still have climbed more than 30 percent in the last 12 months.
UnitedHealth is the first health insurer to announce earnings every quarter, and many analysts and investors see it as a bellwether for other insurers. The company’s first-quarter performance is a sign that the sector “is poised to showcase solid fundamentals,” Leerink analyst Ana Gupte said in a research note.
The Blue Cross-Blue Shield company Anthem Inc. will be the next major insurer to report on the first quarter when it releases results April 25.
Elements of this story were generated by Automated Insights (http://automatedinsights.com/ap) using data from Zacks Investment Research. Access a Zacks stock report on UNH at https://www.zacks.com/ap/UNH