UnitedHealth Group reported third quarter results. Revenues for the nine months ended September 30, 2015 grew 17 percent year-over-year to $113.5 billion.
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Net earnings to common shareholders grew 12 percent to $4.6 billion and cash flows from operations were $6.2 billion, exceeding net earnings by $1.6 billion.
UnitedHealthcare and Optum each produced double digit percentage increases in revenues and earnings from operations over the nine-month period. The company continues to project 2015 net earnings in a range of $6.25 to $6.35 per share, and cash flows from operations of $8.4 billion to $8.6 billion.
UnitedHealth Group’s third quarter 2015 revenues of $41.5 billion grew 27 percent or $8.7 billion year-over-year.
Revenue growth was broad-based, with UnitedHealthcare’s revenues up 9 percent and Optum’s revenues growing by double digit percentages in total and in each reporting segment.
Third quarter earnings from operations were $3.0 billion and net earnings to common shareholders were $1.65 per share. The after-tax margin of 3.8 percent declined year-over-year due to business mix, as expected, from increased pharmacy care services revenues and greater levels of government-sponsored benefits business.
Third quarter 2015 cash flows from operations of $2.8 billion exceeded 170 percent of net earnings in the quarter.
The consolidated medical care ratio of 80.6 percent in the third quarter of 2015 increased 90 basis points yearover-year due to increased medical spending for Medicare Star quality performance, an increased mix of government-sponsored benefits business and lower levels of reserve development.
The medical care ratiodecreased 80 basis points sequentially from 81.4 percent in the second quarter of 2015 and medical cost trends remained consistent with expectations.
Reserves developed favorably by a total of $150 million in the quarter, including $100 million for medical services provided in 2014, as compared to a total of $270 million in reserve development recognized in the third quarter of 2014.
The third quarter 2015 operating cost ratio of 15.2 percent improved 140 basis points year-over-year due to shifts in business mix and improvements in productivity. ■