UnitedHealth Stock Higher As Optum Drives Q3 Earnings Beat, 2022 Outlook Boost

Double-digit sales gains for Optum once again helped UnitedHealth to stronger-than-expected third quarter earnings and a full-year profit boost.

UnitedHealth Group  (UNH) – Get UnitedHealth Group Incorporated (DE) Report posted better-than-expected third quarter earnings Friday, powered once again by double-digit gains from its Optum division, while boosting its full-year profit forecast. 

UnitedHealth said adjusted profits for the three months ended in September came in at $5.79 a share, up 28% from the same period last year and 37 cents ahead of the Wall Street consensus forecast.

Group revenues, UnitedHealth said, rose 11.8% to $80.9 billion, again topping analysts’ estimates of an $80.5 billion tally, while Optum revenue rose 17.1% to $46.6 billion.

Looking into the final months of the year UnitedHealth forecast adjusted earnings between $21.85 to $22.05 per share, up from a prior forecast of $21.40 to $21.90 per share.

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“The strength of our performance reflects the diligence and determination of our colleagues to improve people’s experience across the health care system and make high-quality care simpler, more accessible and more affordable,” said CEO Andrew Witty.  

UnitedHealth shares, a Dow component, were marked 0.32% higher in pre-market trading immediately following the earnings release to indicate an opening bell price of $511.55 each, a move that would trim the stock’s six-month decline to around 4.4%.

Last month, Judge Carl Nichols of the U.S. District Court for the District of Columbia denied a request from the Department of Justice to block UnitedHealth’s proposed merger with healthcare technology group Change Healthcare  (CHNG) – Get Change Healthcare Inc. Report.

The DoJ had raised antitrust concerns over the $8 billion deal, first unveiled in January, and argued that it would give UnitedHealth access to healthcare plans offered by rival such as Humana  (HUM) – Get Humana Inc. Report and Anthem, while allowing the combined group to service around 95% of the top health insurance companies in the country.

Judge Nichols, however, allowed the deal go ahead, provided UnitedHealth completes the agreed $2.2 billion sale of Change’s claims edit subsidiary, ClaimsXten, to a private equity group.

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