UnitedHealth Group (UNH) Tops Q2 EPS by 5c
UnitedHealth Group (NYSE: UNH) reported Q2 EPS of $1.64, $0.05 better than the analyst estimate of $1.59. Revenue for the quarter came in at $36.3 billion versus the consensus estimate of $35.66 billion.
Highlights:
- Second quarter earnings from operations were $2.9 billion and net earnings of $1.64 per share increased 15 percent year-over-year. The after-tax margin of 4.4 percent was steady, expanding 10 basis points year-over-year.
- Second quarter 2015 cash flows from operations of $1.2 billion grew 15 percent year-over-year due to growth in risk-based products and the expansion in overall earnings.
- The consolidated medical care ratio decreased 20 basis points year-over-year to 81.4 percent in the second quarter of 2015. Medical cost trends remained controlled and consistent with management expectations. Reserves developed favorably by a total of $90 million in the quarter.
- The second quarter 2015 operating cost ratio of 16.1 percent increased 10 basis points year-over-year due to higher growth in services businesses and higher ACA taxes, largely offset by productivity improvements.
- The second quarter 2015 tax rate of 42.2 percent increased 90 basis points year-over-year due to higher levels of nondeductible ACA fees.
- Second quarter 2015 days sales outstanding of 15 days and days claims payable of 48 days were both flat year-over-year.
- The Company’s balance sheet remained strong, with a debt to total capital ratio of 35.4 percent at June 30, 2015, a reduction of 120 basis points from 36.6 percent at March 31, 2015. Second quarter 2015 return on equity was 19.5 percent, an increase of 230 basis points year-over-year.
- During the quarter, UnitedHealth Group increased the annual dividend payment rate by 33 percent to $2.00 per share. UnitedHealth Group repurchased $57 million in stock in the second quarter, bringing year-to-date repurchases to more than 8.5 million shares for $953 million. As previously disclosed, the Company moderated its repurchase activity in the second quarter in connection with the Catamaran merger and is committed to maintaining its strong financial position and current debt ratings.
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