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UnitedHealth (UNH) to Post Q2 Earnings: Will Revenue Rise Aid?

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UnitedHealth Group Inc. (UNH - Free Report) is set to release second-quarter 2020 earnings on Jul 15, before market open.

The Zacks Consensus Estimate for the company’s earnings per share is pegged at $5, indicating an increase of 38.89% from the year-ago reported figure. The consensus mark for revenues stands at $63.74 billion, suggesting a rise of 5.2% from the prior-year reported number.

Factors at Play

Revenues at the UnitedHealthcare segment are likely to have gained from higher enrollment and increased pricing. The Zacks Consensus Estimate for this segment’s revenues is currently pegged at $50.4 billion, implying 3.8% growth from the year-ago quarter’s reported figure. Moreover, its business groups, namely Employer and Individual, Medicare and Retirement are expected to have contributed to earnings. Also, revenue growth and cost control are likely to have aided the segmental earnings.

Further, revenues at Optum segment are likely to have improved on strong contributions from each of its sub-segments, such as OptumHealth, OptumInsight and OptumRx. The Zacks Consensus Estimate for this segment’s revenues currently stands at $31.3 billion, hinting at an 11.8% improvement from the year-ago quarter’s reported figure.

The company is likely to have experienced greater strength in total medical membership as well, driven by growth in members served in the Commercial and Medicare Advantage, partially offset by lower Medicaid and International membership.

However, share repurchases made by UnitedHealth in the to-be-reported quarter are likely to have benefited its bottom line.

Earnings Surprise History

The company boasts an attractive earnings surprise history. Its bottom line beat estimates in each of the last four quarters, the average being 3.29%. This is depicted in the chart below:

What Our Model Says

Our proven model predicts an earnings beat for UnitedHealth this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: UnitedHealth has an Earnings ESP of +7.69% as the Most Accurate Estimate stands at $5.38 per share while the Zacks Consensus Estimate is pegged at $5.

Zacks Rank: UnitedHealth currently has a Zacks Rank #2. 

You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks That Warrant a Look

Here are some other companies worth considering from the healthcare sector as our model shows that these too have the right combination of elements to beat on earnings this reporting cycle:

Humana Inc. (HUM - Free Report) has an Earnings ESP of +1.26% and a Zacks Rank #2, currently.

Centene Corp. (CNC - Free Report) has an Earnings ESP of +0.01% and a Zacks Rank #3, presently.

Cigna Corp. (CI - Free Report) has an Earnings ESP of +4.27% and a Zacks Rank of 2 at present.

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