UnitedHealth Stock Pops On Q2 Earnings Beat and Raised Outlook - Earnings By The Numbers

UnitedHealth Group Inc UNH reported nearly $5.5 billion, up 8% Y/Y in Q2 profits as its health insurance plans and Optum medical provider businesses grew by "double-digit" percentages despite rising costs.

The company reported Q2 FY23 sales of $92.9 billion, up almost 16% Y/Y, beating the consensus of $91 billion.

Adjusted EPS of $6.14 increased 14% Y/Y, surpassing the consensus of $6.01.

Q2 medical care ratio was 83.2% compared to 82.2% in Q1 FY23 and 81.5% a year ago, driven by previously noted outpatient care activity, primarily among seniors and business mix. 

The operating cost ratio was 14.9% compared to 14.8% in the last quarter and 14.6% a year ago.

Also Read: Biden Administration Releases Revised Guidance For Medicare Drug Price Negotiation Amid Industry Lawsuits.

UnitedHealthcare segment revenues grew 13% to $70.2 billion, reflecting growth in the number of people served, and operating earnings grew 13% to $4.4 billion.

The total number of people UnitedHealthcare serves with medical benefits has increased by over 1.1 million year-to-date.

Optum Q2 revenues grew 25% to $56.3 billion, and operating earnings grew 13% to $3.7 billion. Optum Health's revenue per consumer served increased 33%.

Guidance: The Q2 financial results alleviated investor concerns regarding the potential growth impediment caused by escalating medical expenses within the health insurance sector.

Instead, UnitedHealth again raised its FY23 net earnings outlook, increasing it to "$23.45-$23.75 per share and adjusted net earnings to $24.70-$25.00 per share (vs. consensus of $24.80)," compared to prior guidance of $23.25-$23.75 per share and $24.50-$25.00 per share, respectively.

Price Action: UNH shares are up 3.61% at $463.90 during premarket trading on the last check Friday.