UnitedHealth Group Inc., the biggest U.S. health insurer, provided a forecast for profit next year that was below analyst estimates as the company prepares for a poor business environment and reductions in government revenue.
Earnings in 2013 will be $5.25 to $5.50 a share, while revenue will be $123 billion to $124 billion, the Minnetonka, Minnesota-based company said today in a filing with the Securities and Exchange Commission. Analysts anticipated $5.58 a share and $119.4 billion, based on the average estimates compiled by Bloomberg. UnitedHealth will hold its annual investor conference tomorrow to discuss the company’s outlook.
Chief Executive Officer Stephen Hemsley said on Oct. 16 that analysts’ predictions for next year appeared optimistic, given the “weak business climate and employment outlook.” Government cuts may also slow growth in revenue from Medicaid plans for the poor and Medicare coverage for the elderly, he said. The two programs have helped lead the insurers’ surge in enrollment this year.
“Because of cost trends, they’re overly conservative on what they think they’ll come in at,” said Ana Gupte, a Sanford C. Bernstein & Co. analyst in New York, in a telephone interview. “The revenue guidance was pretty strong.”
UnitedHealth fell less than 1 percent to $53.50 at 8:05 a.m. New York time. The shares had risen 23 percent in the 12 months through yesterday.
The insurer also reaffirmed its 2012 earnings forecast of $5.20 to $5.25 a share in today’s statement.
Last month, UnitedHealth raised this year’s forecast after reporting that enrollment in its Medicare and Medicaid plans surged in the third quarter and medical costs stayed stable. It was the third time this year the company increased the 2012 outlook. UnitedHealth added 2.1 million customers to its medical plans from a year earlier, and the share of customer premiums spent on health care dropped.
UnitedHealth on Oct. 8 agreed to pay about $4.9 billion to buy 90 percent of Amil Participacoes SA, a Brazilian insurer and hospital chain.
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