UnitedHealth Group reported on Thursday second quarter earnings that were off by roughly one-third compared with last year, but beat expectations for profit and revenue.
The Minnetonka-based health care giant upped financial guidance for the year and touted growth prospects with the moderation of the COVID-19 pandemic in the U.S.
The company’s share price was off slightly in early trading.
“The strengthening of our sales pipeline is a key opportunity as we emerge from the COVID market pause,” chief executive Andrew Witty said during a call with investors. “I have great confidence that we’re emerging from the last 18 months of disruption with an unprecedented set of opportunities to help improve the health system for all of those we can serve.”
During the year-ago quarter, UnitedHealth Group’s profit surged as COVID-19 drove a shutdown of non-emergency health care across the U.S. The company operates UnitedHealthcare, which is the nation’s largest health insurer, so premiums collected at the time far exceeded health care costs.
Health care services that were deferred in 2020 will continue to weigh on financial results this year, the company says, along with the cost of testing and treatment related to COVID-19. Most of those expenses are expected to hit during the second half of the year.
Company officials have been watching for signs that deferred care will result in sicker patients who will require more costly services when they return to the health care system.
UnitedHealth Group is Minnesota’s largest company by revenue and employs about 330,000 people worldwide. The company also runs a health services business called Optum that includes a fast-growing division with clinics, surgery centers and urgent care providers.
For the three-month period ending June 30, UnitedHealth posted a profit of $4.37 billion on $71.32 billion of revenue, down about 34% from the year-ago quarter’s earnings of $6.64 billion on $62.14 billion of revenue.
After adjusting for one-time factors, earnings per share of $4.70 easily beat the $4.46 expected by analysts surveyed by Refinitiv.
UnitedHealth Group now expects full-year adjusted earnings of $18.30 to $18.80 per share, up from the previous range of $18.10 to $18.60 per share.
At the end of June, the company was providing health insurance coverage to more than 44 million people in the U.S., up by about 135,000 people compared with March 31.
OptumHealth, the division that operates health care clinics, posted second quarter earnings from operations of about $1.3 billion, up from $841 million in the year-ago quarter.
In morning trading Thursday, UnitedHealth Group shares were up slightly, at about $417.