UnitedHealth Group businesses achieved broad-based growth in the third quarter of 2016, with consolidated revenues increasing 12 percent or $4.8 billion year-over-year to $46.3 billion.
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Year-to-date, UnitedHealthcare revenues grew 12 percent year-over-year, with double-digit percentage growth across all domestic businesses on strong, diversified enrollment growth.
Optum revenues grew 34 percent year-to-date, with year-over-year revenue growth by business at Optum ranging from 20 percent to 41 percent.
UnitedHealth Group’s third quarter earnings from operations grew 19 percent year-over-year to $3.6 billion and adjusted net earnings grew 23 percent to $2.17 per share.
Year-over-year operating margin improvement of 40 basis points and a lower effective tax rate combined to lift the consolidated net margin by 50 basis points to 4.3 percent in the quarter.
Third quarter 2016 cash flows from operations were $7.2 billion. After adjusting to reflect cash received from CMS in the proper period, third quarter cash flows from operations of $3.4 billion grew 22 percent year-over-year and were 1.7 times net earnings in the quarter.
Year-to-date 2016 adjusted cash flows from operations of $7.4 billion grew 19 percent year-over-year and were 1.4 times year-to-date net earnings.
The consolidated medical care ratio decreased 60 basis points year-over-year to 80.3 percent in the third quarter. Year-to-date, the medical care ratio of 81.3 percent decreased 10 basis points over the prior year period.
Third quarter 2016 favorable reserve development of $120 million included $230 million of favorable development from the first two quarters of 2016. Medical cost trends remained within expectations.
The third quarter 2016 operating cost ratio of 15.2 percent increased 30 basis points year-over-year due to increased levels of investment in the business to support future growth.
The third quarter 2016 tax rate of 40.3 percent decreased year-over-year, in line with expectations.
Third quarter 2016 days claims payable of 52 days increased 2 days year-over-year and 1 day sequentially; days sales outstanding of 15 days was stable year-over-year and decreased 3 days sequentially due to government receivable collections.
The company increased its outlook for 2016 GAAP net earnings to approximately $7.45 per share and adjusted net earnings to approximately $8.00 per share, from its previous range of $7.25 to $7.40 in GAAP net earnings per share and $7.80 to $7.95 in adjusted net earnings per share. ■