What does UnitedHealth (UNH) revenue hold in the third quarter? – October 11, 2021

UnitedHealth Group Inc. (A H Free Report) is expected to release third quarter 2021 results on October 14, ahead of the opening bell.

Q3 estimates

Zacks’ consensus estimate for earnings per share is set at $ 4.41, which indicates a 25.64% increase from the figure released a year ago. The consensus mark in revenue stands at $ 71.55 billion, which suggests growth of 9.89% from the figure released in the previous year’s quarter.

Key factors to note

Revenues of UnitedHealthcare (contributes 78% of total revenues), the largest segment of the company that sells insurance, is likely to have increased due to increased membership in community and senior programs . The company is likely to have added members to Medicare Advantage (MA), Medicaid plans. Strong insurance sales for dental and ophthalmic plans may have contributed to premium growth.

In another segment named Optum (22% of revenue), revenue growth is expected to have been driven by a higher contribution from its OptumHealth and Optum Insight sub-segments. OptumRx is likely to have shown lukewarm growth.

In its OptumHealth sub-segment, revenue and profits likely improved with higher revenue per consumer served. This advantage may have been driven by an increased number of people served through value-based care arrangements and by the growing acuity of the care services offered by the company.

Optum Insight revenue and profits are likely to have increased due to growth in technology services and offerings and improved productivity. Further business gains, contract extensions and growth in the full managed services pipeline are expected to have boosted revenue.

The operating cost ratio, which measures expenses incurred in proportion to revenues, is likely to have declined following the cancellation of the Medicare tax and the pursuit of operational efficiencies. This, in turn, is likely to have been partly offset by the mix of activities and significant investments in growth and innovation.

The company’s bottom line is expected to reflect the net adverse impact of COVID-19, such as testing and treatment costs. The return of care, which has been postponed to 2020 due to the pandemic, could possibly have increased usage and claims.

History of surprise earnings

The company can boast a surprising profit history. Its net profit has beaten estimates in each of the past four quarters, averaging 12.49%. This is illustrated in the graphic below:

What our quantitative model predicts

Zacks’ proven model does not conclusively predict an increase in profits for UnitedHealth this time around. The combination of a positive earnings ESP and a Zacks # 1 (strong buy), 2 (buy), or 3 (hold) ranking increases the odds of beating the winnings. But it is not the case here.

ESP on income: UnitedHealth has an ESP on earnings of +1.95%. You can discover the best stocks to buy or sell before they are flagged with our ESP Earnings Filter.

Zack Rank: UnitedHealth currently wears a Zacks Rank # 2. You can see The full list of today’s Zacks # 1 Rank stocks here

Other actions to consider

Here are some other stocks to consider in the medical space with the perfect combination of elements to exceed estimates in their upcoming quarterly releases:

Anthem, Inc. (ANTM Free Report) has an ESP on earnings of + 2.71% and is currently ranked 3rd in Zacks.

HCA Health, Inc. (HCA Free Report) is currently ranked Zacks # 2 and has a revenue ESP of + 11.08%.

Tenet Healthcare Company (THC Free Report) has an ESP on earnings of + 14.83% and a Zacks Rank of 2, currently.


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