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UnitedHealth Group reported strong second quarter 2019 results, beating expectations

by Thomas Dworetzky, Contributing Reporter | July 22, 2019
Business Affairs
UnitedHealth has record Q2 profits with total revenues at $60.6 billion, up 8 percent year over year; with $4.7 billion earnings from operations, up 13 percent to $4.7 billion; net earnings and adjusted net earnings both up 15 percent year over year; and cash flows from operations of $5.9 billion for the quarter.

“Our results in the quarter reflect strong and balanced performance from both Optum and UnitedHealthcare, and are driven by the 320,000 women and men of UnitedHealth Group who focus every day on creating value for those we serve,” CEO of UnitedHealth Group David S. Wichmann said in a statement.

The strong start to 2019 has led the company to boost its annual net earnings outlook from $13.95 to $14.15 per share, and its adjusted net earnings to $14.70 to $14.90 per share.

The group's Q2 2019 revenues rose $4.5 billion, or 8 percent year over year, to $60.6 billion, thanks to nearly a 12 percent jump in revenue growth at UnitedHealthcare Medicare & Retirement, and a 14 percent boost in operating earnings at OptumRx and OptumHealth, according to the Associated Press.

Jefferies analyst David Windley called the group's management of selling, general and administrative expenses "impressive" in a research note, according to the news service.

Second quarter dividend payments grew to $1 billion as the annual dividend rate jumped 20 percent to $4.32 per share in June 2019. A total of 6.4 million shares were repurchased for $1.5 billion in Q2 — bringing year-to-date buybacks to 18.2 million shares at a cost of $4.5 billion.

Despite the strong performance, the group's stock is still under pressure from external forces, notably the push for “Medicare for All”, along with other calls for alternative types of healthcare cost controls.

In other UnitedHealth news in July, John Muir Health and Optum have announced a new relationship focusing on delivering healthcare to patients in the Bay Area.

The deal has Optum managing key nonclinical functions, including information technology, revenue cycle management, analytics, purchasing and claims processing. Optum will also become more involved in enhancing John Muir Health’s Physician Network ambulatory care coordination and utilization management services.

“Optum’s expertise and capabilities will help us expand upon the high-quality patient care we provide to the Bay Area community,” said Cal Knight, president and CEO of John Muir Health in a statement.

Hopes are that the new relationship will help pave the way for more effective healthcare for those in the area.

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