UnitedHealth Group Reports $3B Profit in 3Q
For the quarter, Minnetonka-based UnitedHealth Group logged a net income of $3.17 billion, a 10 percent decline from the same quarter last year. That’s also a steady drop from the second quarter, when the company reported $6 billion in profit.
Though profit declined, UnitedHealth Group’s revenue saw a healthy increase, growing to $65 billion. That compares to about $60 billion in the same quarter last year. Officials attributed the uptick, in part, to growth in Optum, the company’s pharmacy benefit management arm. Optum’s revenue grew by more than 20 percent to nearly $35 billion in the third quarter.
“OptumHealth served 98 million people in the third quarter, compared to 95 million a year ago, while revenue per consumer served increased 25 perent year-over-year,” the company said.
Meanwhile, commercial enrollments in UnitedHealthcare plans declined during the quarter. But execs say that was offset by an increase in people enrolling in public options like Medicaid and Medicare.
“The number of people served in commercial products declined primarily due to employer actions,” CFO John Rex said during a Wednesday morning call with investors. Most of that decline came from “very large employers,” he noted. Unsurprisingly, that primarily included companies in the hospitality sector, but also those in transportation and energy.
Rex noted that enrollment in the company’s Medicaid plans grew in the quarter, though he was hesitant to link that with job losses.
“We have not yet seen material Medicaid enrollment activity due to job loss,” he said.
During the Wednesday morning call, UnitedHealth execs also told shareholders to expect bigger earnings for the rest of 2020 and into the new year. The company adjusted its full-year earnings per share outlook from $15.65 to $15.90.
“We’re optimistic in particular about our relative competitive position and the growth prospects for 2021,” said CEO David Wichmann.