UnitedHealth Group expects 2015 revenues of approximately $143 billion, an increase of $2 billion from the previous outlook.
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This is due to stronger business growth in the first quarter. Earnings are now expected to be in a range of $6.15 to $6.30 per share, an increase from the prior outlook of $6.00 to $6.25 per share, despite absorbing approximately $0.10 per share from the proposed combination with Catamaran Corporation, including transaction costs and the effect of moderated share repurchase activity.
Management expects the combination to contribute $0.30 per share to UnitedHealth Group's 2016 earnings. Reflecting the increased outlook for revenues and earnings, the company is raising its projection for 2015 cash flows from operations to a range of $8.2 billion to $8.4 billion.
UnitedHealth Group's first quarter 2015 revenues of $35.8 billion grew 13 percent or more than $4 billion yearover-year. Revenue growth was broad-based, with both UnitedHealthcare and Optum revenues growing b
First quarter earnings from operations were $2.6 billion and net earnings of $1.46 per share increased 33 percent year-over-year. With strengthened overall operating performance compared to the first quarter of 2014, the net margin of 4.0 percent expanded 50 basis points year-over-year.
First quarter 2015 cash flows from operations of $2.3 billion were 1.6 times net earnings and grew 61 percent year-over-year due to growth in risk-based products and the expansion in overall earnings.
The consolidated medical care ratio decreased 140 basis points year-over-year to 81.1 percent in the first quarter of 2015. Prior year medical reserve development was $140 million, compared to $220 million in the first quarter of 2014.
The first quarter 2015 operating cost ratio of 16.6 percent increased 20 basis points year-over-year due to higher growth in services businesses. The first quarter 2015 tax rate of 43.3 percent increased 130 basis points year-over-year due to higher levels of nondeductible ACA fees.
First quarter 2015 days sales outstanding of 13 days increased 1 day year-over-year, due to higher growth in government programs. Days claims payable was flat year-over-year at 47 days.
The company's balance sheet remained strong, with a debt to total capital ratio of 36.6 percent at March 31, 2015. UnitedHealth Group repurchased $900 million in stock in the first quarter, acquiring more than 8 million shares, and grew dividend payments to shareholders by 29 percent year-over-year to $357 million. ■