After the health-care company posted second-quarter sales and adjusted earnings that were above Wall Street’s expectations despite growing medical expenditures, UnitedHealth Group’s stock price surged on Friday.
After the Minnesota-based company warned the market last month about a spike in demand for elective surgery and outpatient services, the findings allayed investor concerns.
The price of UnitedHealth’s shares increased by over 7% on Friday. However, the stock has lost more than 9% of its value so far this year.
By market capitalization and sales, UnitedHealth Group is the largest healthcare organization in the US, surpassing even the biggest banks in the country.
Due to its scale, UnitedHealth Group is seen as a leading indicator for the larger health insurance industry. As of Friday’s close, its market worth was almost $447 billion.
For the quarter, UnitedHealth Group reported net income of $5.47 billion, or $5.82 per share. Comparatively, $5.07 billion, or $5.34 per share, was earned at the same time last year.
The company’s adjusted earnings per share for the period were $6.14, excluding certain adjustments.
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UnitedHealth Group Posts 16% Sales Increase
In comparison to the same quarter last year, the company’s total sales for the quarter increased 16% to $92.9 billion.
$33.6 billion in “eliminations,” or payments from the company’s UnitedHealthcare operation to its other division, Optum, are not included in that.
Because it is paying itself, UnitedHealth Group is unable to classify those transactions as income.
More than 50 million individuals are served by UnitedHealthcare, which experienced a 13% increase in second-quarter revenue from a year earlier to $70.2 billion.
Optum, the company’s second platform, saw revenue rise by over 25% from the previous year to $56.3 billion.
Optum is a provider of healthcare services and one of the biggest pharmacy benefit managers, or middlemen, who bargains for large employers and health insurance when it comes to medication manufacturer discounts.
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Source: Cnbc.com