Dow component UnitedHealth pops on earnings beat

UnitedHealthcare office
Michael Nagle | Bloomberg | Getty Images
UnitedHealthcare office

UnitedHealth shares jumped 1.2 percent Tuesday after it reported fourth-quarter earnings that beat Wall Street's expectations, helped by growth in its services business.

Here's UnitedHealth's results vs. what Wall Street expected:

  • Earnings: $3.28 per share vs. $3.21 per share, forecast by Refinitiv.
  • Revenue: $58.42 billion vs. $58.01 billion, forecast by Refinitiv.

Revenue from Optum, which includes the company's pharmacy benefits management business, grew 13 percent to $27.56 billion in the fourth quarter, while revenue from its mainstay insurance business rose 11.1 percent to $46.23 billion.

The company said its full-year revenue in 2018 grew 12 percent to $226 billion. UnitedHealth reaffirmed its 2019 forecast for earnings between $14.40 and $14.70 per share.

The Hopkins, Minnesota-based company's medical loss ratio, or the percentage of premiums paid out for medical services, was 81.6 percent in the quarter compared with 82.1 percent last year. The Street was expecting 81.8 percent.

There were "no red flags" in the report, said Ana Gupte, senior health-care services analyst Leerink Partners, on CNBC's "Squawk Box." That "just bodes well for the group."

UnitedHealth, the nation's largest health insurance and health-care services firm, was one of a handful of Dow components that traded higher ahead of earnings.

United's earnings beat analyst's expectations more than 90 percent of the time, according to Bespoke Investment Group, on average by 2.9 percent. The company's revenue tops estimates about two-thirds of the time by about 1 percent on average.

Analysts were watching for any news on the company's acquisition strategy, which has been focused primarily on extending its Optum division's services portfolio.

— CNBC's Bertha Coombs and Reuters contributed to this report.