UnitedHealth Group reports $1.9 billion in profit for last quarter of 2016
Year-over-year revenues grew by 18 percent; company expects close to $200 billion in revenues for 2017.
UnitedHealth Group includes both UnitedHealthcare and Optum.
UnitedHealth Group raked in $1.9 billion in profit for the last quarter of 2016, compared to $1.2 billion for the last three months of 2015, the company reported Tuesday.
UnitedHealth Group released its earnings report for 2016 showing revenues growing 18 percent year-over-year to $185 billion.
For 2017, the company estimates revenues of $197 to $199 billion.
For the full year, UnitedHealth Group yielded net earnings of $7.2 billion compared to $5.8 billion the previous year, according to the financial report.
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Earnings from operations for 2016 were $13.3 billion, a 3.9 percent net margin. This compared to year-end 2015 earnings from operations of $11 billion, a 3.7 percent net margin.
UnitedHealth Group's revenues from premiums increased for the last three months of 2016 compared to the same period in 2015, $36 billion compared to $31 billion, but revenues from products decreased. For the last three months of 2015, products accounted for $8.3 billion of revenue, while in 2016, products made up $6.9 billion of revenue.
"Revenue growth was broad-based and balanced, reflecting growing demand for the company's product and service offering," the insurer said.
UnitedHealth Group includes both UnitedHealthcare and Optum.
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UnitedHealthcare and Optum earnings from operations were reported at $1.7 billion each in the fourth quarter. UnitedHealthcare had operating margins of 4.6 percent and Optum, 8.1 percent.
In 2016, Optum revenues grew by $16 billion, or 23.7 percent to $83.6 billion.
Fourth quarter revenues grew 1.2 percent year-over-year, reflecting strong double-digit growth at OptumHealth and OptumInsight, offset by a 4.8 percent decline in OptumRx revenue due to known Catamaran customer losses incurred prior to its acquisition by Optum.
Operating costs remained relatively stable year-over-year.
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Optum's full year earnings from operations grew more than $1.3 billion or 31.8 percent year over year to $5.6 billion, and the full year operating margin was 6.7 percent. The fourth quarter operating margin was 8.1 percent.
OptumHealth revenues grew 21.4 percent, driving by growth in healthcare delivery businesses as well as expansion of behavioral services into new Medicaid markets.
OptumInsight grew by 18.4 percent, driven by growth in revenue management, business process outsourcing and technology services.
In 2016, OptumRx increased 25.2 percent, though fourth quarter revenues declined 4.8 percent due to Catamaran customer losses.
Twitter: @SusanJMorse
