UnitedHealth expects strong 2023 earnings as COVID costs ease
Reuters
Published Oct 14, 2022 06:03AM ET
Updated Oct 14, 2022 11:06AM ET
By Manas Mishra
(Reuters) -UnitedHealth Group Inc expects to meet Wall Street's loftier expectations for 2023 profit after the health insurer raised its annual profit forecast for the third time on Friday, helped by lower COVID costs.
An industry bellwether and the first health insurer to report third-quarter earnings set a positive tone with its 2022 forecast raise and quarterly profit beat, sending its shares up nearly 3% and lifted rivals including Humana Inc (NYSE:HUM) and Cigna Corp (NYSE:CI).
UnitedHealth (NYSE:UNH) says the direct impact of COVID-19 - which has led to fluctuations in health insurers' medical costs - is expected to ease next year, while recovery in non-urgent procedures could slow due to inflation and labor shortages.
"I think it's become much less about COVID. There's now I think a blend of possibly a little bit of COVID effect in the system, and cost of living effects," Chief Executive Officer Andrew Witty said.
The company says it has not yet seen any recessionary impact on its commercial business that provides employer-backed insurance plans, and expects strength in the business this year as well as in government-backed health plans.
Analysts' estimates for 2023 profit are currently at the higher end of the forecast that UnitedHealth expects to issue in the coming weeks, Witty said. They are expecting adjusted earnings of $24.85 per share, according to Refinitiv IBES data.
The company expects adjusted 2022 profit between $21.85 and $22.05 per share compared with $21.40 to $21.90 forecast earlier.
In the third quarter ended Sept. 30, a lower-than-expected medical care ratio helped the company report profit above expectations.
The ratio - a percentage of premiums versus payouts on claims - improved to 81% from 83% last year. Analysts had expected 82.4%.
Excluding items, UnitedHealth earned $5.79 per share, beating estimates of $5.42.
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.