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UnitedHealth Group Revenue Topped $200B in 2017, Net Earnings Grew 50 Percent

The insurer expects its earnings and cash flow will jump by $1.7 billion in 2018 as a result of the recently-passed federal tax reform.

UnitedHealth Group Revenue Topped $200B in 2017, Net Earnings Grew 50 Percent
UnitedHealth Group's Minnetonka headquarters
UnitedHealth Group, the nation’s largest insurer and Minnesota’s largest company by revenue, announced Tuesday its revenue in 2017 exceeded $200 billion, a new record for the Minnetonka-based company and one that could likely push it into the top five of the Fortune 500 rankings.
 
Only a handful of American businesses last year cracked the $200 billion mark: Walmart, Berkshire Hathaway, Apple and Exxon Mobil. Pharmaceutical and health tech company McKesson was the only other business to place above UnitedHealth in the 2017 Fortune 500 list, which ranked fiscal 2016 revenues. McKesson’s 2017 revenue, however, was just $198.5 billion, while CVS Health, General Motors and other companies in the Fortune 500’s top ten aren’t likely or were unable to reach the $200 billion mark in their 2017 fiscal year.
 
UnitedHealth reported earnings of $10.6 billion off of roughly $201.2 billion in revenue during its fiscal year, which ends on December 31. Year-over-year, its sales and earnings jumped by 9 and 50 percent, respectively.
 
The result was carried in part by the company’s fourth quarter outcome, during which its revenue grew nearly 10 percent to $52 billion. Earnings growth in Optum, its health-tech services division, as well as in UnitedHealthcare, its health benefits department, helped to more than double the company’s adjusted earnings from $1.7 billion, or $2.11 a share, a year ago to $3.7 billion, or $2.59 a share, in its most recent quarter.
 
Analysts polled by Thomson Reuters didn’t expect the insurance company to perform to such heights. The Wall Street analysts predicted adjusted earnings of $2.51 per share and $51.5 billion in revenue.
 
The better-than-expected result, paired with anticipated savings of $1.7 billion from the recently-passed federal tax law, pushed UnitedHealth to raise its 2018 outlook.
 
The company now expects adjust earnings in its next fiscal year to land between $12.30 and $12.60 per share.
 
Around the U.S., companies have been raising their financial forecasts, citing the corporate tax reform has reason to improve employee pay wages, give bonuses or search for acquisition opportunities. The improved earnings and cash flow UnitedHealth is expecting will instead go toward investments in “existing initiatives and artificial intelligence, data analytics, individual health record custodianship, digital health, net promotor score improvements and health related initiatives in local communities,” the company’s CEO David Wichmann told analysts on a Tuesday conference call.
 
UnitedHealth stock was up 2 percent on Tuesday to $233.21 a share.
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