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Key Takeaways from UnitedHealth Group 1Q15 Earnings

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Apr. 17 2015, Published 2:01 p.m. ET

1Q15 earnings overview

UnitedHealth Group (UNH) posted its 1Q15 earnings on April 16, 2015. The company beat Wall Street EPS (earnings per share) estimates of $1.35, posting $1.46 EPS. In 1Q15, UnitedHealth Group registered revenues and net income of $35.8 billion and $1.4 billion, respectively.

Following the company’s 1Q15 earnings announcement, UnitedHealth Group’s share price increased by 3.6%.

Among its peers in the healthcare services industry (XLV), UnitedHealth Group is generally the first company to announce its quarterly earnings. Aetna (AET), Humana (HUM), and Cigna (CI) will be releasing 1Q15 earnings on April 28, April 29, and April 30, respectively.

Compared to 1Q14, UnitedHealth Group’s 1Q15 net income rose by 33%. This performance is attributed to the strong revenue growth across all of the company’s diversified businesses, coupled with effective medical and operating cost management.

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Diversified business model

UnitedHealth Group consists mainly of two business segments:

  1. UnitedHealthcare – responsible for providing medical insurance benefits and services
  2. Optum – responsible for providing ancillary technology and pharmacy services

Compared to 4Q14, UnitedHealthcare organically added 1 million more enrollments in 1Q15. Enrollment growth was also higher than in 1Q14, at 1.6 million people. UnitedHealthcare’s operating margin improved by 100 basis points year-over-year to 5.8%, reflecting strong performance in all its businesses—Medicare, Medicaid, and commercial.

Optum also kept its net margin stable at 5.8% year-over-year, despite additional acquisition-related costs.

About the company

UnitedHealth Group is the largest health insurance company in the US, with a market capitalization of $116 billion. For more about the company, read UnitedHealth Group: The history of a health insurance giant.

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