On Thursday, Shares of UnitedHealth Group Incorporated (NYSE:UNH), declined -1.56% to $120.17.
UnitedHealth Group Incorporated, stated third quarter results, highlighted by ongoing, strong diversified growth.
Merged year-to-date results reflected continued steady growth and balanced performance across the Company. Revenues for the nine months ended September 30, 2015 grew 17 percent year-over-year to $113.5 billion, net earnings to common shareholders grew 12 percent to $4.6 billion and cash flows from operations were $6.2 billion, surpassing net earnings by $1.6 billion. UnitedHealthcare and Optum each produced double digit percentage improvements in revenues and earnings from operations over the nine-month period. The Company continues to project 2015 net earnings in a range of $6.25 to $6.35 per share, and cash flows from operations of $8.4 billion to $8.6 billion.
“Our 2015 results are reflecting balanced growth across a diversity of businesses and product categories. We believe this growth will continue because we are serving people more effectively, simplifying their health care experiences, and offering practical innovations that assist deliver more value to the consumer and the health care system as a whole,” said Stephen J. Hemsley, chief executive officer of UnitedHealth Group.
- UnitedHealth Group’s third quarter 2015 revenues of $41.5 billion grew 27 percent or $8.7 billion year-over-year. Revenue growth was broad-based, with UnitedHealthcare’s revenues up 9 percent and Optum’s revenues growing by double digit percentages in total and in each reporting segment.
- Third quarter earnings from operations were $3.0 billion and net earnings to common shareholders were $1.65 per share. The after-tax margin of 3.8 percent declined year-over-year due to business mix, as predictable, from raised pharmacy care services revenues and greater levels of government-sponsored benefits business.
- Third quarter 2015 cash flows from operations of $2.8 billion exceeded 170 percent of net earnings in the quarter.
- The merged medical care ratio of 80.6 percent in the third quarter of 2015 raised 90 basis points year-over-year due to raised medical spending for Medicare Star quality performance, an raised mix of government-sponsored benefits business and lower levels of reserve development. The medical care ratio reduced 80 basis points sequentially from 81.4 percent in the second quarter of 2015 and medical cost trends remained compriseent with expectations. Reserves developed favorably by a total of $150 million in the quarter, counting $100 million for medical services offered in 2014, as contrast to a total of $270 million in reserve development recognized in the third quarter of 2014.
- The third quarter 2015 operating cost ratio of 15.2 percent improved 140 basis points year-over-year due to shifts in business mix and improvements in productivity.
- The third quarter 2015 tax rate of 42.0 percent raised 20 basis points year-over-year due to higher levels of nondeductible ACA fees.
- Third quarter 2015 days claims payable of 50 days raised 2 days sequentially and by 1 day year-over-year; days sales outstanding of 15 days were compriseent with second quarter.
- The Company’s balance sheet remained strong, with a debt to total capital ratio of 49 percent at September 30, 2015, contrast to 35 percent at June 30, 2015, due to the issuance of debt to fund the Catamaran acquisition in July 2015. Third quarter 2015 return on equity was 19.3 percent.
- UnitedHealth Group repurchased $177 million in stock in the third quarter, bringing year-to-date repurchases to more than 10 million shares for $1.1 billion. As formerly revealed, the Company has moderated its repurchase activity in connection with the Catamaran acquisition.
UnitedHealth Group Incorporated operates as a diversified health and well-being company in the United States. The company’s UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; and health care coverage, and health and well-being services to individuals aged 50 and older addressing their needs for preventive and acute health care services.
On other hand, AbbVie Inc. (NYSE:ABBV) has lost -20.87% from its peak and trades at just 11.14 times forward earnings projections. The consensus price target for the stock is $75.64 a share. The 52-week range is $51.88 - 71.60. Up 6.14% over 12 months, the company has a market cap of $92.93B; its shares recently traded at around $56.14. The P/E ratio is 43.86.
AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. The company’s products comprise HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; VIEKIRA PAK, an all-oral, short-course, interferon-free therapy, with or without ribavirin, for adult patients with genotype 1 chronic hepatitis, counting those with compensated cirrhosis; Kaletra, an anti-HIV-1 medicine used with other anti-HIV-1 medications as a treatment that maintains viral suppression in people with HIV-1; Norvir, a protease inhibitor indicated in combination with other antiretroviral agents to treat HIV-1 infection; and Synagis to prevent respiratory syncytial virus infection in high risk infants.
