(AP) — UnitedHealth Group’s second quarter earnings beat Wall Street expectations, helped by a surge in government-funded coverage, and the nation’s largest health insurer hiked its 2018 forecast again.
UnitedHealth now expects adjusted earnings to range between $12.50 and $12.75 per share. That’s up from a forecast for $12.40 to $12.65 per share that the company laid out in April. The hike announced Tuesday marked the third increase for the year.READ MORE: What To Do When Severe Weather Strikes While Boating
Analysts expect, on average, earnings of $12.63, according to FactSet.
In the second quarter, UnitedHealth added 450,000 more customers to its Medicare Advantage business, which provides privately run versions of the federal government’s Medicare program, and another 330,000 to its UnitedHealthcare Community and State business. That segment runs state- and federally funded Medicaid coverage for the poor and people who have disabilities.
The insurer’s total enrollment advanced nearly 5 percent to 48.8 million people.
Health insurance is the biggest revenue generator for UnitedHealth. But it also has been pouring resources into its Optum segment, which generates a larger operating margin. The Optum segment provides pharmacy benefits management and technology services. It also runs a growing number of clinics and urgent care and surgery centers.
The insurer said Tuesday that operating earnings from Optum grew more than 21 percent to $1.8 billion in the second quarter.READ MORE: Feds Investigating Hepatitis A Outbreak Linked To Organic Strawberries; Cases Reported In Minnesota
Overall, net income jumped 28 percent to $2.92 billion dollars in the three months that ended June 30. Adjusted earnings totaled $3.14 per share, and total revenue grew 12 percent to $56.09 billion.
Analysts had expected per-share earnings of $3.03 from Minnetonka, Minnesota-based UnitedHealth, according to Zacks Investment Research. Revenue matched Wall Street expectations.
Shares of UnitedHealth slipped in early-morning trading, movement analysts attributed to the insurer’s higher-than-expected medical loss ratio of 81.9 percent. That measures the portion of premiums paid out in medical claims.
That ratio came in only slightly above Wall Street expectations, but such a miss “invites scrutiny,” Jefferies analyst David Windley said in a research note.
Shares of UnitedHealth Group Inc., a component of the Dow Jones industrial average, have climbed 17 percent since the beginning of the year. The stock price passed $250 earlier this year, setting a fresh round of new, all-time high marks.MORE NEWS: Witt Jr. Hits 3 Doubles, Ups Extra-Base Count, KC Tops Twins, 7-3
(© Copyright 2018 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)