UnitedHealth Group, the biggest U.S. health insurer, reported a better-than-anticipated fourth-quarter profit Wednesday and stated it expects strong gross sales of its government health plans this year.
UnitedHealth expects to enroll 700,000 more individuals in its Medicare Advantage plans in 2020, CEO David Wichmann mentioned on a call to discuss the quarterly outcomes. That was on the upper end of the Medicare Advantage forecast the company offered at its investor conference in December.
Shares of UnitedHealth, the first leading U.S. insurer to report earnings this season, have been up over 2% at $294.65, lifting shares of competitors Anthem, Humana, and Cigna Corp by about 1%.
Evercore ISI analyst Michael Newshel stated the inventory was likely reacting to the stable Medicare Advantage enrollment forecast.
Newshel further cited the industry bellwether’s feedback regarding limited value impact from the present flu season, which picked up pace in the last few weeks, based on the U.S. Centers for Disease Control and Prevention.
Wednesday’s share increase comes on the back of gains in insurer shares over the last two months as fears relieved that the 2020 presidential election would result in a significant reshuffle of the U.S. healthcare system.
UnitedHealth affirmed its full-year estimation for 2020 adjusted earnings of $16.25 to $16.55 per share, with a midpoint a bit below analysts’ average estimates of $16.46, based on Refinitiv data.
Total income climbed 4.3% to $60.90 billion, shy of Wall Street expectations of $61.04 billion.
Sales of the firm’s core business selling health insurance plans surged 4.4% to $48.25 billion.