UnitedHealth Group (NYSE: UNH) reported Q1 EPS of $3.72, $0.09 better than the analyst estimate of $3.63. Revenue for the quarter came in at $64.4 billion versus the consensus estimate of $64.33 billion.

• UnitedHealth Group’s first quarter 2020 revenues grew $4.1 billion or 6.8% to $64.4 billion, reflecting broad-based revenue growth across Optum and UnitedHealthcare.
• First quarter earnings from operations grew $164 million or 3.4% year-over-year to $5.0 billion. Adjusted net earnings per share were in line with the same period last year. Both reflected higher earnings from operations, offset by a higher tax rate from the return of the health insurance tax and the extra calendar days this quarter.
• Cash flows from operations were $2.9 billion, or 0.8 times net income, impacted by timing factors as noted in the fourth quarter 2019.
• The medical care ratio of 81.0% in first quarter 2020 decreased from 82.0% last year in the same quarter, due primarily to the return of the health insurance tax, partially offset by the impact of the extra calendar days. Favorable reserve development was $580 million compared to $300 million in the year ago quarter. Days claims payable were 50.5 days compared to 48.9 days in the first quarter 2019 and 50.8 days in the fourth quarter 2019.
• The operating cost ratio of 15.5% in first quarter 2020 increased from 14.1% in the same period last year, primarily due to the return of the health insurance tax and business mix, partially offset by productivity improvements.
• Return on equity of 23.6% continued to reflect the company’s strong overall margin profile. Dividend payments grew 19.1% year-over-year to $1.0 billion and the company repurchased 6.2 million shares for $1.7 billion in first quarter 2020.
• Corporate cash available was $10.9 billion at the end of the first quarter 2020 reflecting measures taken to assure strong liquidity levels in response to financial market volatility particularly evident in March 2020. As a result, the debt to total capital ratio was 46.3% to end the quarter. Adjusted for the excess corporate cash balances, the debt to total capital ratio was 40.5%.

"From the outset of the COVID-19 pandemic, our singular priority has remained clear: the health, safety and support of the people and communities we serve, including our dedicated team of 325,000 people and the heroic members of the health care workforce, and the reliability and sustainability of health care delivery systems,” said David S. Wichmann, chief executive officer of UnitedHealth Group.

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