UnitedHealth fourth-quarter profit tops views
UnitedHealth Group Inc
UnitedHealth also announced a shuffling of its top management, including a new chief financial officer, that could set up succession plans at the company.
UnitedHealth, whose diversity and size make it a bellwether for the industry, said net income rose 10 percent to $1.04 billion, or 94 cents per share, from $944 million, or 81 cents per share, a year earlier.
Analysts on average had expected 84 cents per share, according to Thomson Reuters I/B/E/S. Some analysts also excluded a charge related to a sale from calculations, making the beat even greater than 10 cents per share.
Revenue rose 10 percent to $24.03 billion. Analysts had expected $23.7 billion.
Health insurers benefited throughout 2010 from more people postponing doctor visits and procedures to save money, and UnitedHealth had previously suggested its fourth-quarter results could outperform if the use of medical services remained low.
Enrollment in UnitedHealth's plans rose 3 percent to 37.5 million.
Enrollment in its commercial plans serving employers increased 8 percent. Membership in its Medicare Advantage plans for the elderly rose 16 percent, while its Medicaid plans for low-income Americans grew 14 percent.
The various business lines seemed to perform well, with enrollment up sequentially in every reportable segment, Wells Fargo analyst Peter Costa said.
The company named David Wichmann, who had previously been president of the company's operations, as chief financial officer. He replaces Mike Mikan, who will take responsibility for oversight of the company's health services businesses, an area where the company is placing greater emphasis.
It also said Gail Boudreaux would assume responsibility for all of UnitedHealth's health benefits businesses, widening her scope beyond just the company's commercial plans.
The appointments, effective immediately, appeared to be setting up a possible horse race among the three executives to succeed Chief Executive Officer Stephen Hemsley. Hemsley, 58, had his contract renewed in December for four years.
The company also said it intends to sell its clinical trial support businesses for mid- and late-stage studies to privately held inVentiv Health.
UnitedHealth continues to project 2011 earnings per share at $3.50 to $3.70, representing a roughly 12 percent decline from 2010. Health insurers face new rules this year from the healthcare overhaul that will require them to meet spending thresholds for medical care as opposed to administrative costs and profit.
The Minneapolis-based company said it expects 2011 revenue of about $100 billion, compared with projecting $99 billion to $100 billion previously, citing strong customer retention, growth across its businesses and contributions from recent deals.
(Reporting by Lewis Krauskopf; Editing by Lisa Von Ahn and Gerald E. McCormick)
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