UnitedHealth Shares Jump After Projecting Big Revenue Gains For 2017

UnitedHealth Shares Jump After Projecting Big Revenue Gains For 2017

The health insurance company’s stock has risen more than 41 percent in the last 12 months.

UnitedHealth Group told investors on Tuesday that it was anticipating significant revenues gains in 2017, pushing its share price up nearly 4 percent over the course of the day to $157.75.
 
UnitedHealth Group, the largest health insurance company by market share in the U.S., expects to handily beat Wall Street’s 2017 adjusted earnings per share estimate of $9.14 as the Minnetonka-based company is projecting earnings per share in the range of $9.30 to $9.60.
 
The positive outlook harkens back to last month when UnitedHealth Group CEO Stephen Hemsley said in the company's third quarter report that its “growth indicators are positive as we conclude 2016, and we expect to be well positioned in 2017.”
 
Altogether, the health insurance behemoth is expecting revenue of $197 billion to $199 billion next year, a roughly $40 billion difference from its 2015 full-year revenue. (UnitedHealth Group’s 2016 fourth quarter and full year results won’t be released until mid-January.)
 
UnitedHealth expects its health care technology division, Optum, will continue to be a cash cow, as demand for health IT services is projected to drive its revenue up 8 to 10 percent in 2017. Documents provided to investors show UnitedHealth sees OptumHealth—a subdivision within Optum—as being poised for up to 17 percent year-over-year growth. In all, Optum is said to have revenues next year of $90 billion to $91 billion.
 
In other news for Optum, its pharmacy-focused subdivision, OptumRx, announced on Tuesday that it would partner with CVS Health on the creation of a new pharmacy network solution for CVS’s more than 9,600 retail stores.
 
Together, the two companies will offer eligible patients the option to fill 90-day prescriptions at prices equal to home delivery copay levels at CVS locations or through OptumRx’s home delivery service.
 
“This strategic relationship will enhance patients’ access to care, lower costs, and improve health outcomes,” CVS Pharmacy president Helena Foulkes said in a statement.
 
The new 90-day pharmacy option is expected to roll out in July 2017.