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Can UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q4 Earnings?
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UnitedHealth Group Incorporated (UNH - Free Report) is set to release its fourth-quarter 2023 results on Jan 12, 2024 before the opening bell. As a significant player in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance. Growth in Community & State, Medicare & Retirement and Employer & Individual Domestic is expected to have supported the unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits worldwide. While it has significant exposure to the Medicare and Medicaid markets, it also serves individuals and employers. The defensive properties of the sector enable UnitedHealth to maintain its momentum despite economic headwinds.
In the last reported quarter, the segment’s revenues jumped 12.7% year over year to $69.9 billion, whereas the operating income improved 20.9% to $4.6 billion.
UnitedHealthcare's Q3 Performance
Considering the unit’s products, premiums increased 12.4% year over year to $66.7 billion in the third quarter, whereas service revenues rose 4.7% to $2.6 billion. Total revenues from the Employer & Individual Domestic, Medicare & Retirement and Community & State businesses increased 5.8%, 14.8% and 15.6% year over year, respectively, in the third quarter. Also, from global operations, UNH reported revenues of $2.4 billion, up 14% year over year.
Forecast for Q4 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates an 8.8% year-over-year increase from the year-ago level of $63 billion, whereas our model estimate suggests an 8.3% rise. The consensus mark for fourth-quarter operating income signals a nearly 10% year-over-year rise from $2.9 billion a year ago, while our model predicts a 14.7% increase.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have remained elevated in the fourth quarter. This is expected to have resulted in UNH having a lower portion of premiums remaining after settling payments. As such, the consensus mark for the fourth-quarter 2023 medical care ratio is pegged at 83.92%, indicating an increase from the year-ago level of 82.80%, while our estimate of 83.35% suggests a lower jump.
The Zacks Consensus Estimate for fourth-quarter 2023 global revenues indicates an increase of 5.7% year over year from $2.2 billion. Our model estimate for Employer & Individual Domestic revenues predicts more than 3% year-over-year growth to nearly $16.8 billion.
The consensus mark for UnitedHealthcare’s Community & State revenues suggests a nearly 7% increase from the year-ago period’s $16.5 billion, whereas our model estimate is pegged at $18.6 billion. The consensus estimate for Medicare & Retirement business’ revenues suggests 13.2% year-over-year growth from $28.1 billion a year ago, while our estimate indicates a nearly 10% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in the commercial domestic business indicates a 2.9% increase from the year-ago level of 26,685 thousand, while our estimate implies a 2.4% rise. The consensus mark for total UnitedHealthcare medical membership calls for 2.6% year-over-year growth in the fourth quarter.
Final Thoughts
The UnitedHealthcare unit is anticipated to have positioned the company for significant year-over-year growth. The Zacks Consensus Estimate for UNH’s fourth-quarter earnings of $5.98 per share signals a 12% increase from the prior-year figure of $5.34. The consensus estimate for revenues of $92 billion indicates an 11.1% increase from the year-ago reported figure.
However, elevated costs and expenses are expected to have influenced fourth-quarter profit margins, creating uncertainty about exceeding earnings expectations. Our estimate for medical costs indicates a 9.4% year-over-year increase, while we expect operating expenses to have increased to $13.1 billion. Further, we expect the cost of products sold to have jumped 17.6% year over year in the fourth quarter.
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
UnitedHealth has an Earnings ESP of +0.54% and currently carries a Zacks Rank #4 (Sell).
UnitedHealth Group Incorporated Price and EPS Surprise
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies from the broader Medical space that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this time:
The Zacks Consensus Estimate for Celldex’s bottom line for the to-be-reported quarter has improved 7.1% in the past 30 days. CLDX beat earnings estimates in two of the past four quarters, met once and missed on the other occasion.
The Cigna Group (CI - Free Report) has an Earnings ESP of +1.33% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Cigna’s earnings per share for the to-be-reported quarter indicates a 31.5% year-over-year jump. CI beat earnings estimates in each of the past four quarters, the average surprise being 2.5%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +2.47% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Centene’s bottom line for the to-be-reported quarter is pegged at 42 cents per share, which has remained stable over the past week. The consensus mark for CNC’s revenues is pegged at more than $36 billion, signaling 1.4% year-over-year growth.
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Can UnitedHealth's (UNH) UnitedHealthcare Unit Aid Q4 Earnings?
UnitedHealth Group Incorporated (UNH - Free Report) is set to release its fourth-quarter 2023 results on Jan 12, 2024 before the opening bell. As a significant player in the healthcare sector, a sustained rise in membership is expected to have aided its quarterly performance. Growth in Community & State, Medicare & Retirement and Employer & Individual Domestic is expected to have supported the unit.
UnitedHealthcare Business
Through this segment, UNH offers healthcare benefits worldwide. While it has significant exposure to the Medicare and Medicaid markets, it also serves individuals and employers. The defensive properties of the sector enable UnitedHealth to maintain its momentum despite economic headwinds.
In the last reported quarter, the segment’s revenues jumped 12.7% year over year to $69.9 billion, whereas the operating income improved 20.9% to $4.6 billion.
UnitedHealthcare's Q3 Performance
Considering the unit’s products, premiums increased 12.4% year over year to $66.7 billion in the third quarter, whereas service revenues rose 4.7% to $2.6 billion. Total revenues from the Employer & Individual Domestic, Medicare & Retirement and Community & State businesses increased 5.8%, 14.8% and 15.6% year over year, respectively, in the third quarter. Also, from global operations, UNH reported revenues of $2.4 billion, up 14% year over year.
Forecast for Q4 Segment Performance
The Zacks Consensus Estimate for UnitedHealthcare’s revenues indicates an 8.8% year-over-year increase from the year-ago level of $63 billion, whereas our model estimate suggests an 8.3% rise. The consensus mark for fourth-quarter operating income signals a nearly 10% year-over-year rise from $2.9 billion a year ago, while our model predicts a 14.7% increase.
With seniors resuming elective procedures that were delayed due to pandemic-related constraints, medical costs are expected to have remained elevated in the fourth quarter. This is expected to have resulted in UNH having a lower portion of premiums remaining after settling payments. As such, the consensus mark for the fourth-quarter 2023 medical care ratio is pegged at 83.92%, indicating an increase from the year-ago level of 82.80%, while our estimate of 83.35% suggests a lower jump.
The Zacks Consensus Estimate for fourth-quarter 2023 global revenues indicates an increase of 5.7% year over year from $2.2 billion. Our model estimate for Employer & Individual Domestic revenues predicts more than 3% year-over-year growth to nearly $16.8 billion.
The consensus mark for UnitedHealthcare’s Community & State revenues suggests a nearly 7% increase from the year-ago period’s $16.5 billion, whereas our model estimate is pegged at $18.6 billion. The consensus estimate for Medicare & Retirement business’ revenues suggests 13.2% year-over-year growth from $28.1 billion a year ago, while our estimate indicates a nearly 10% improvement.
The Zacks Consensus Estimate for UnitedHealthcare’s total number of people served in the commercial domestic business indicates a 2.9% increase from the year-ago level of 26,685 thousand, while our estimate implies a 2.4% rise. The consensus mark for total UnitedHealthcare medical membership calls for 2.6% year-over-year growth in the fourth quarter.
Final Thoughts
The UnitedHealthcare unit is anticipated to have positioned the company for significant year-over-year growth. The Zacks Consensus Estimate for UNH’s fourth-quarter earnings of $5.98 per share signals a 12% increase from the prior-year figure of $5.34. The consensus estimate for revenues of $92 billion indicates an 11.1% increase from the year-ago reported figure.
However, elevated costs and expenses are expected to have influenced fourth-quarter profit margins, creating uncertainty about exceeding earnings expectations. Our estimate for medical costs indicates a 9.4% year-over-year increase, while we expect operating expenses to have increased to $13.1 billion. Further, we expect the cost of products sold to have jumped 17.6% year over year in the fourth quarter.
Our proven model does not conclusively predict an earnings beat for UnitedHealth this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is not the case here.
UnitedHealth has an Earnings ESP of +0.54% and currently carries a Zacks Rank #4 (Sell).
UnitedHealth Group Incorporated Price and EPS Surprise
UnitedHealth Group Incorporated price-eps-surprise | UnitedHealth Group Incorporated Quote
You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are some companies from the broader Medical space that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this time:
Celldex Therapeutics, Inc. (CLDX - Free Report) has an Earnings ESP of +30.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Celldex’s bottom line for the to-be-reported quarter has improved 7.1% in the past 30 days. CLDX beat earnings estimates in two of the past four quarters, met once and missed on the other occasion.
The Cigna Group (CI - Free Report) has an Earnings ESP of +1.33% and is a Zacks #3 Ranked player.
The Zacks Consensus Estimate for Cigna’s earnings per share for the to-be-reported quarter indicates a 31.5% year-over-year jump. CI beat earnings estimates in each of the past four quarters, the average surprise being 2.5%.
Centene Corporation (CNC - Free Report) has an Earnings ESP of +2.47% and is a Zacks #2 Ranked player.
The Zacks Consensus Estimate for Centene’s bottom line for the to-be-reported quarter is pegged at 42 cents per share, which has remained stable over the past week. The consensus mark for CNC’s revenues is pegged at more than $36 billion, signaling 1.4% year-over-year growth.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.