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UnitedHealth Group Reports First Quarter 2023 Results

  • Revenues of $91.9 Billion, Grew 15% Year-Over-Year
  • Earnings from Operations Grew 16%
  • Cash Flows from Operations were $16.3 Billion; Adjusted Cash Flows from Operations were $5.1 Billion
  • Earnings were $5.95 Per Share, Adjusted Earnings $6.26 Per Share

UnitedHealth Group (NYSE: UNH) reported first quarter 2023 results reflecting consistent broad-based growth at Optum and UnitedHealthcare.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20230414005084/en/

UnitedHealth Group corporate headquarters (Photo: Business Wire)

UnitedHealth Group corporate headquarters (Photo: Business Wire)

“Our strong, enterprise-wide growth this quarter is a direct result of our colleagues’ unwavering commitment to offering more health services to more people and connecting consumers with greater access to high-quality, affordable care,” said Andrew Witty, chief executive officer of UnitedHealth Group.

Growth in the first quarter was led by serving more people across the enterprise and the company’s expanding capabilities to care for them more comprehensively. The company increased its full year net earnings outlook to $23.25 to $23.75 per share and adjusted net earnings to $24.50 to $25.00 per share.

Quarterly Financial Performance

 

Three Months Ended

 

 

March 31,

2023

 

March 31,

2022

 

December 31,

2022

 

 

Revenues

$91.9 billion

 

$80.1 billion

 

$82.8 billion

Earnings from Operations

$ 8.1 billion

 

$ 7.0 billion

 

$ 6.9 billion

Net Margin

6.1%

 

6.3%

 

5.8%

  • UnitedHealth Group’s first quarter 2023 revenues grew 15% to $91.9 billion year-over-year, including diversified double-digit growth at both Optum and UnitedHealthcare.
  • First quarter 2023 earnings from operations were $8.1 billion, an increase of 16%, with strong contributions from both Optum and UnitedHealthcare. Year-over-year earnings growth was led by Optum Health as a result of its growing positive impact in serving patients with value-based care services.
  • The first quarter 2023 medical care ratio at 82.2% compared to 82% last year, due to business mix. Days claims payable were 47.8, compared to 49.9 in the fourth quarter 2022 and 49.1 in the first quarter 2022. Favorable medical reserve development in the first quarter of $470 million compared to $620 million in the fourth quarter 2022 and $290 million in the year ago first quarter.
  • The first quarter 2023 operating cost ratio of 14.8% increased from 14.2% in 2022 due to business mix and the company’s continued investments to accelerate and support future growth opportunities, partially offset by continued productivity advances.
  • Cash flows from operations for the first quarter 2023 were $16.3 billion or 2.8-times net income. Excluding the impact of April CMS payments received at the end of March, adjusted cash flows from operations were $5.1 billion or 0.9-times net income, consistent with the company’s outlook. The company returned $3.5 billion to shareholders in the first quarter through dividends and share repurchases. Return on equity of 28.2% in the quarter reflected the company’s consistent and diverse earnings profile and efficient capital structure.

UnitedHealthcare provides health care benefits globally, serving individuals and employers, and Medicare and Medicaid beneficiaries. UnitedHealthcare is dedicated to improving the value customers and consumers receive by improving health and wellness, enhancing the quality of care received, simplifying the health care experience and reducing the total cost of care.

Quarterly Financial Performance

 

Three Months Ended

 

March 31,

2023

 

March 31,

2022

 

December 31,

2022

 

 

Revenues

$70.5 billion

 

$62.6 billion

 

$63.0 billion

Earnings from Operations

$ 4.3 billion

 

$ 3.8 billion

 

$ 2.9 billion

Operating Margin

6.2%

 

6.1%

 

4.7%

  • UnitedHealthcare first quarter revenues grew 13% to $70.5 billion and operating earnings grew 14% to $4.3 billion, reflecting growth in the number of people served.
  • In the first quarter of 2023, UnitedHealthcare grew to serve nearly 2 million more people than a year ago, with broad-based growth across the company’s commercial, community-based and senior benefit offerings. The number of consumers served with domestic commercial benefit offerings grew 665,000 in the first quarter 2023 compared to year-end 2022, reflecting continued focus on innovative, affordable, consumer-centric benefit plans. Recent Medicaid contract awards in Indiana and Texas will expand the products and geographies served. UnitedHealthcare is pacing strongly to its outlook for another year of market-leading growth in serving more people through its Medicare Advantage offerings.

Optum’s health services businesses serve the global health care marketplace, including payers, care providers, employers, governments, life sciences companies and consumers. Using market-leading information, analytics and technology to yield clinical insights, Optum helps improve overall health system performance: optimizing care quality, reducing care costs and improving the consumer experience.

Quarterly Financial Performance

 

Three Months Ended

 

 

March 31,

2023

 

March 31,

2022

 

December 31,

2022

 

 

Revenues

$54.1 billion

 

$43.3 billion

 

$47.9 billion

 

Earnings from Operations

$ 3.7 billion

 

$ 3.2 billion

 

$ 4.0 billion

 

Operating Margin

6.9%

 

7.3%

 

8.3%

 

  • Optum first quarter revenues grew 25% to $54.1 billion and operating earnings grew 19% to $3.7 billion.
  • Optum Health revenue per consumer served increased 34% over the year ago quarter, driven by growth in people served under value-based care arrangements. The results reflect continued expansion of the care services offered to meet patients’ care needs across at-home, digital and in-clinic settings.
  • Optum Insight’s revenue backlog increased by 35% to $30.7 billion, compared to a year ago, driven by the addition of Change Healthcare and growth in comprehensive managed services offerings for health systems. Optum Insight continues to accelerate its integration activities and investments in services, capabilities and product offerings to care providers and health plans.
  • Optum Rx’s revenue growth of 15% in the first quarter resulted from advances in serving new clients and further expansion of its specialty and community-based pharmacy offerings. Adjusted scripts grew to 378 million compared to 352 million last year.

About UnitedHealth Group

UnitedHealth Group (NYSE: UNH) is a health care and well-being company with a mission to help people live healthier lives and help make the health system work better for everyone through two distinct and complementary businesses. Optum delivers care aided by technology and data, empowering people, partners and providers with the guidance and tools they need to achieve better health. UnitedHealthcare offers a full range of health benefits, enabling affordable coverage, simplifying the health care experience and delivering access to high-quality care. Visit UnitedHealth Group at www.unitedhealthgroup.com and follow @UnitedHealthGrp on Twitter.

Earnings Conference Call

As previously announced, UnitedHealth Group will discuss the company’s results, strategy and future outlook on a conference call with investors at 8:45 a.m. Eastern Time today. UnitedHealth Group will host a live webcast of this conference call from the Investor Relations page of the company’s website (www.unitedhealthgroup.com). Following the call, a webcast replay will be on the Investor Relations page and at https://uhg.com/Replay through April 28, 2023. This earnings release and the Form 8-K dated April 14, 2023, can also be accessed from the Investor Relations page of the company’s website.

Non-GAAP Financial Information

This news release presents non-GAAP financial information provided as a complement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). A reconciliation of the non-GAAP financial information to the most directly comparable GAAP financial measure is provided in the accompanying tables found at the end of this release.

Forward-Looking Statements

The statements, estimates, projections, guidance or outlook contained in this document include “forward-looking” statements which are intended to take advantage of the “safe harbor” provisions of the federal securities law. The words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “forecast,” “outlook,” “plan,” “project,” “should” and similar expressions identify forward-looking statements. These statements may contain information about financial prospects, economic conditions and trends and involve risks and uncertainties. Actual results could differ materially from those that management expects, depending on the outcome of certain factors including: our ability to effectively estimate, price for and manage medical costs; new or changes in existing health care laws or regulations, or their enforcement or application; reductions in revenue or delays to cash flows received under government programs; changes in Medicare, the CMS star ratings program or the application of risk adjustment data validation audits; the DOJ’s legal action relating to the risk adjustment submission matter; our ability to maintain and achieve improvement in quality scores impacting revenue; failure to maintain effective and efficient information systems or if our technology products do not operate as intended; cyberattacks, other privacy/data security incidents, or our failure to comply with related regulations; risks and uncertainties associated with our businesses providing pharmacy care services; competitive pressures, including our ability to maintain or increase our market share; changes in or challenges to our public sector contract awards; failure to achieve targeted operating cost productivity improvements; failure to develop and maintain satisfactory relationships with health care payers, physicians, hospitals and other service providers; the impact of potential changes in tax laws and regulations (including any increase in the U.S. income tax rate applicable to corporations); increases in costs and other liabilities associated with litigation, government investigations, audits or reviews; failure to manage successfully our strategic alliances or complete, manage or integrate strategic transactions; risks associated with public health crises arising from large-scale medical emergencies, pandemics, natural disasters and other extreme events; fluctuations in foreign currency exchange rates; failure to attract, develop, retain, and manage the succession of key employees and executives; our investment portfolio performance; impairment of our goodwill and intangible assets; failure to protect proprietary rights to our databases, software and related products; downgrades in our credit ratings; and our ability to obtain sufficient funds from our regulated subsidiaries or from external financings to fund our obligations, maintain our debt to total capital ratio at targeted levels, maintain our quarterly dividend payment cycle, or continue repurchasing shares of our common stock.

This above list is not exhaustive. We discuss these matters, and certain risks that may affect our business operations, financial condition and results of operations, more fully in our filings with the SEC, including our reports on Forms 10-K, 10-Q and 8-K. By their nature, forward-looking statements are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify. Actual results may vary materially from expectations expressed or implied in this document or any of our prior communications. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. We do not undertake to update or revise any forward-looking statements, except as required by law.

UNITEDHEALTH GROUP
 
Earnings Release Schedules and Supplementary Information
Quarter Ended March 31, 2023
 
- Condensed Consolidated Statements of Operations
 
- Condensed Consolidated Balance Sheets
 
- Condensed Consolidated Statements of Cash Flows
 
- Supplemental Financial Information - Businesses
 
- Supplemental Financial Information - Business Metrics
 
- Reconciliation of Non-GAAP Financial Measures
 
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share data)
(unaudited)
 
Three Months Ended

March 31,

 

2023

 

 

2022

 

Revenues    
Premiums

$

72,786

 

$

64,070

 

Products

 

10,267

 

 

9,340

 

Services

 

8,080

 

 

6,372

 

Investment and other income

 

798

 

 

367

 

     Total revenues

 

91,931

 

 

80,149

 

Operating costs
Medical costs

 

59,845

 

 

52,523

 

Operating costs

 

13,625

 

 

11,401

 

Cost of products sold

 

9,405

 

 

8,487

 

Depreciation and amortization

 

970

 

 

788

 

     Total operating costs

 

83,845

 

 

73,199

 

Earnings from operations

 

8,086

 

 

6,950

 

Interest expense

 

(754

)

 

(433

)

Earnings before income taxes

 

7,332

 

 

6,517

 

Provision for income taxes

 

(1,558

)

 

(1,369

)

Net earnings

 

5,774

 

 

5,148

 

Earnings attributable to noncontrolling interests

 

(163

)

 

(121

)

Net earnings attributable to UnitedHealth Group common shareholders

$

5,611

 

$

5,027

 

Diluted earnings per share attributable to
UnitedHealth Group common shareholders

$

5.95

 

$

5.27

 

Adjusted earnings per share attributable to
UnitedHealth Group common shareholders (a)

$

6.26

 

$

5.49

 

Diluted weighted-average common shares outstanding

 

943

 

 

954

 

 

(a) See page 6 for a reconciliation of the non-GAAP measure

 
UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions)
(unaudited)
 

March 31,

December 31,

2023

2022

Assets
Cash and short-term investments

$

46,497

$

27,911

Accounts receivable, net

 

22,414

 

17,681

Other current assets

 

24,984

 

23,477

Total current assets

 

93,895

 

69,069

Long-term investments

 

46,884

 

43,728

Other long-term assets

 

142,900

 

132,908

Total assets

$

283,679

$

245,705

Liabilities, redeemable noncontrolling interests and equity
Medical costs payable

$

31,809

$

29,056

Short-term borrowings and current maturities of long-term debt

 

9,931

 

3,110

Other current liabilities

 

74,742

 

57,071

Total current liabilities

 

116,482

 

89,237

Long-term debt, less current maturities

 

60,657

 

54,513

Other long-term liabilities

 

15,918

 

15,608

Redeemable noncontrolling interests

 

4,801

 

4,897

Equity

 

85,821

 

81,450

Total liabilities, redeemable noncontrolling interests and equity

$

283,679

$

245,705

UNITEDHEALTH GROUP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
(unaudited)
 
Three Months Ended

March 31,

 

2023

 

 

2022

 

Operating Activities
Net earnings

$

5,774

 

$

5,148

 

Noncash items:
Depreciation and amortization

 

970

 

 

788

 

Deferred income taxes and other

 

                                     (263

)

 

178

 

Share-based compensation

 

362

 

 

299

 

Net changes in operating assets and liabilities

 

9,484

 

 

(1,094

)

Cash flows from operating activities

 

16,327

 

 

5,319

 

Investing Activities
Purchases of investments, net of sales and maturities

 

(2,319

)

 

(1,632

)

Purchases of property, equipment and capitalized software

 

(760

)

 

(555

)

Cash paid for acquisitions, net

 

(7,826

)

 

(1,231

)

Other, net

 

                                     (115

)

 

                                     (255

)

Cash flows used for investing activities

 

(11,020

)

 

(3,673

)

Financing Activities
Common share repurchases

 

                                  (2,000

)

 

                                  (2,500

)

Dividends paid

 

                                  (1,537

)

 

                                  (1,363

)

Net change in short-term borrowings and long-term debt

 

                                 12,375

 

 

                                   2,048

 

Other, net

 

                                   4,352

 

 

                                   4,119

 

Cash flows from financing activities

 

                                 13,190

 

 

2,304

 

Effect of exchange rate changes on cash and cash equivalents

 

51

 

 

157

 

Increase in cash and cash equivalents

 

18,548

 

 

4,107

 

Cash and cash equivalents, beginning of period

 

23,365

 

 

21,375

 

Cash and cash equivalents, end of period

$

41,913

 

$

25,482

 

 
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESSES
(in millions, except percentages)
(unaudited)
 
Three Months Ended

March 31,

 

2023

 

2022

Revenues
UnitedHealthcare

$

70,468

 

$

62,595

 

Optum

 

54,059

 

 

43,259

 

Eliminations

 

(32,596

)

 

(25,705

)

Total consolidated revenues

$

91,931

 

$

80,149

 

Earnings from Operations
UnitedHealthcare

$

4,343

 

$

3,798

 

Optum (a)

 

3,743

 

 

3,152

 

Total consolidated earnings from operations

$

8,086

 

$

6,950

 

Operating Margin
UnitedHealthcare

 

6.2

%

 

6.1

%

Optum

 

6.9

%

 

7.3

%

Consolidated operating margin

 

8.8

%

 

8.7

%

 
Revenues
UnitedHealthcare Employer & Individual - Domestic

$

16,544

 

$

15,822

 

UnitedHealthcare Employer & Individual - Global

 

2,163

 

 

2,133

 

UnitedHealthcare Employer & Individual - Total

 

18,707

 

 

17,955

 

UnitedHealthcare Medicare & Retirement

 

33,006

 

 

29,100

 

UnitedHealthcare Community & State

 

18,755

 

 

15,540

 

 
Optum Health

$

23,004

 

$

16,682

 

Optum Insight

 

4,496

 

 

3,219

 

Optum Rx

 

27,418

 

 

23,911

 

Optum eliminations

 

                                     (859

)

 

(553

)

 
 

(a) Earnings from operations for Optum for the three months ended March 31, 2023 and 2022 included $1,776 and $1,366 for Optum Health; $907 and $847 for Optum Insight; and $1,060 and $939 for Optum Rx, respectively.

 
UNITEDHEALTH GROUP
SUPPLEMENTAL FINANCIAL INFORMATION - BUSINESS METRICS
 
 
UNITEDHEALTHCARE CUSTOMER PROFILE
 (in thousands)
 
People Served March 31, 2023 December 31, 2022 March 31, 2022
 
Commercial - Domestic:
Risk-based

 

                                                     8,025

                  8,045

                7,950

Fee-based

 

                                            19,325

                                                       18,640

                                               18,460

Total Commercial - Domestic

27,350

26,685

26,410

Medicare Advantage

                                                                7,545

                            7,105

              6,890

Medicaid

                                                                  8,380

                 8,170

           7,810

Medicare Supplement (Standardized

 

                                                                  4,320

 

                            4,375

 

             4,355

Total Community and Senior

                                                                20,245

                      19,650

                       19,055

Total UnitedHealthcare - Domestic Medical

47,595

         46,335

                  45,465

Commerical - Global

5,295

5,360

5,500

Total UnitedHealthcare - Medical

                                                                    52,890

                                                          51,695

50,965

 
 
Supplemental Data
Medicare Part D stand-alone

3,380

3,295

3,360

 
 
 
OPTUM PERFORMANCE METRICS
 
March 31, 2023 December 31, 2022 March 31, 2022
 
Optum Health Consumers Served (in millions)

 

103

 

102

 

100

Optum Insight Contract Backlog (in billions)

$

30.7

$

30.0

$

22.8

Optum Rx Quarterly Adjusted Scripts (in millions)

 

378

 

370

 

352

 
 
Note: UnitedHealth Group served 152 million unique individuals across all businesses at March 31, 2023.
 
UNITEDHEALTH GROUP
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except per share data)
(unaudited)
 
ADJUSTED NET EARNINGS PER SHARE(a)
 
Three Months Ended

March 31,
Projected Year Ended

December 31,

 

2023

 

 

2022

 

 

2023

 

GAAP net earnings attributable to UnitedHealth Group common shareholders

$

5,611

$

5,027

$21,800 - $22,400
Intangible amortization

388

                                                        281

~1,565
Tax effect of intangible amortization

 

  (96

)

(69

)

~(390)
Adjusted net earnings attributable to UnitedHealth Group common shareholders

$

5,903

$

5,239

$22,975 - $23,575
 
GAAP diluted earnings per share

$

5.95

$

5.27

$23.25 - $23.75
Intangible amortization per share

0.41

               0.29

~1.65
Tax effect per share of intangible amortization

(0.10

)

(0.07

)

~(0.40)
Adjusted diluted earnings per share

$

6.26

 

$

5.49

 

$24.50 - $25.00
 
ADJUSTED CASH FLOWS FROM OPERATIONS(a)
Three Months Ended

March 31, 2023
GAAP cash flows from operations

$

16,327

Less: April CMS premium payments received in March

(11,196

)

Adjusted cash flows from operations

$

5,131

 

(a) Adjusted net earnings per share and adjusted cash flows from operations are non-GAAP financial measures. Non-GAAP financial measures should be considered in addition to, but not as a substitute for, or superior to, financial measures prepared in accordance with GAAP.



Adjusted net earnings per share excludes from the relevant GAAP metric, as applicable, intangible amortization and other items, if any, that do not relate to the Company's underlying business performance. Management believes that the use of adjusted net earnings per share provides investors and management useful information about the earnings impact of acquisition-related intangible asset amortization. As amortization fluctuates based on the size and timing of the Company’s acquisition activity, management believes this exclusion provides a more useful comparison of the Company's underlying business performance and trends from period to period. While intangible assets contribute to the Company’s revenue generation, the intangible amortization is not directly related. Therefore, the related revenues are included in adjusted earnings per share.



Management believes the use of adjusted cash flows from operations provides investors and management with useful information to compare our cash flows from operations for the current period to other periods, when the Company does not receive its monthly payment from the Centers for Medicare and Medicaid Services (CMS) in the applicable quarter. CMS generally remits their monthly payments on the first calendar day of the applicable month. However, if the first calendar day of the month falls on a weekend or a holiday, CMS has typically paid the Company on the last business day of the preceding calendar month. Adjusted cash flows from operating activities presents operating cash flows assuming all CMS payments were received on the first calendar day of the applicable month.

 

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