UnitedHealth climbs 2.6% on an upbeat earnings report

UnitedHealth (NYSE:UNH) recorded a stronger than expected quarterly profit on Wednesday. The company attributed the success to an upbeat performance from multiple businesses and said that it will keep its financial guidance for 2020. The largest health insurer in the United States further added that it is meticulously evaluating the impact of the ongoing Coronavirus pandemic.

In premarket trading on Wednesday, UNH was reported trading 2.6% up at £221.75 per share.

UNH Executive To Work With WHO For COVID-19 Vaccine Development

United is the first U.S-based health insurer to have released its financial results for the first quarter. The company estimates £12.99 per share to £13.22 per share of adjusted net earnings in 2020. According to Refinitiv, analysts are anticipating UnitedHealth to make a lower £12.96 of earnings per share this year.

In its statement on Wednesday, the insurer also highlighted that its president, Andrew Witty, who is also the CEO of Optum that primarily focuses on healthcare data analytics and drug benefits are to collaborate with the World Health Organization for the development of an effective Coronavirus vaccine. In the meantime, United added, the executives will be on a leave of absence from the company.

COVID-19 has so far infected more than 618,000 people in the United States and has caused over 26,000 deaths. The outbreak has pushed the country into resorting to shutting down parts of the world’s largest economy and restrict people to their homes.

In the quarter that ended on 31^st March, the company recorded a medical loss ratio of 81.0% that marked a 1% decline as compared to the same quarter last year. The company cited health insurance tax for the aforementioned decrease. Analysts, on the contrary, had forecast a higher 81.57% medical loss ratio in the recent quarter.

UnitedHealth’s Q1 Net Earnings Were Lower Than The Same Quarter Last Year

UnitedHealth made £2.97 of earnings per share in Q1 versus £2.90 expected and generated total revenue of £51.48 billion that topped analysts’ forecast of £51.40 billion and marked a 6.8% increase as compared to the year-ago figure.

At £2.70 billion, the insurer’s net earnings were lower than £2.77 billion that was recorded in the same quarter last year.

UnitedHealth is currently trading around 5% down year to date in the stock market. The stock had posted an annual increase of around 20% last year. At the time of writing, it has a market cap of £210.44 and a price to earnings ratio of 19.41.