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UnitedHealth Group Raises Its 2019 EPS Outlook

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Apr. 16 2019, Published 1:25 p.m. ET

Fiscal 2019 guidance

In its first-quarter earnings press release, UnitedHealth Group (UNH) revised upwards its outlook for fiscal 2019 net EPS from $13.70–$14.00 to $13.80–$14.05, while adjusted net EPS guidance was raised from $14.40–$14.70 to $14.50–$14.75. In its fourth-quarter earnings press release, the company guided for fiscal 2019 CFO (cash flows from operations) in the range of $17.3 billion to $17.8 billion.

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Operational performance

In the first quarter, UnitedHealth Group reported CFO of $3.22 billion despite suffering a negative impact worth $0.7 billion due to a one-year moratorium on the health insurance tax in fiscal 2019. The company’s CFO was 0.9 times the net income in the first quarter.

At the end of the first quarter, UnitedHealth Group had cash of $15.71 billion on its balance sheet, a YoY rise of 9.67%. In the first quarter, UnitedHealth Group reported earnings from operations of $4.83 billion, a YoY rise of 19.22%. The company’s UnitedHealthcare business reported earnings from operations of $2.95 billion, a YoY rise of 23.08%. The Optum business reported earnings from operations of $1.89 billion, a YoY rise of 13.61%.

In the first quarter, UnitedHealth Group reported a medical care ratio of 82%, a YoY rise of 60 basis points, driven mainly by a one-year moratorium on the health insurance tax in fiscal 2019. The company also reported an operating cost ratio of 14.1%, a YoY decline of 130 basis points. The company reported a net margin of 5.7%, a YoY improvement of 60 basis points.

According to its first-quarter earnings press release, UnitedHealth Group reported a return on equity of 26.8% in the first quarter. The company also reported total dividend payments of $860 million, a YoY rise of 19.1% in the first quarter.

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