UnitedHealth's fourth-quarter net income surged 16%, and investors shrugged off a rare revenue miss to make the nation's largest health insurer one of the biggest gainers in Wednesday trading.
Growing Medicare Advantage coverage and fat profits from UnitedHealth's Optum business, which strays beyond the company's health insurance core, contributed to better-than-expected earnings in the quarter. Revenue grew 4% to $60.9 billion, just shy of analyst projections for $60.96 billion, according to FactSet.
The insurer, a component of the Dow Jones Industrial Average, normally tops Wall Street expectations for earnings and revenue every quarter.
UnitedHealth brought in more than $47 billion in insurance premiums during the quarter, but its product sales tumbled 11% to $7.62 billion.
Product sales include the company's pharmacy benefit management operation, which took a hit when it lost business from Cigna after the rival insurer bought its own PBM.
UnitedHealth earned $3.54 billion in the final quarter of 2019, with adjusted per share profits of $3.90 per share. That's 12 cents better than expected, according to a survey of analysts polled by FactSet.
Analysts expect per-share profits of $16.46 this year, according to FactSet.
The Minnetonka, Minnesota, company covers more than 49 million people, including 5.7 million in its international business. The company saw Medicare Advantage enrollment climb more than 6 percent year over year to 5.2 million people in the quarter.
Medicare Advantage plans are privately run versions of the federal government's coverage program for people over age 65.