UnitedHealth rises on 'minimal' COVID-19 impact on results & maintained its forecast

UnitedHealth Group Inc on Wednesday reported a better-than-expected quarterly profit due to strength in the pharmacy benefit business and maintained its forecast for the year, sending the company’s shares up nearly 3% before the bell.

UnitedHealth, the first health insurer to report results this earnings season, said its quarterly numbers reflect minimal impact from COVID-19 as the U.S. incidence of the fast-spreading respiratory illness worsened only late in the quarter.

The company said Andrew Witty, head of UnitedHealth’s pharmacy benefit unit, Optum, will take a leave of absence to help lead the World Health Organization’s new initiative for COVID-19 vaccine development.

UnitedHealth said it will continue to evaluate the impact of COVID-19 as the year progresses.

“UNH’s outlook demonstrates how well protected managed care sector earnings will be from the COVID-19 crisis in near term from the unprecedented restrictions on elective health care,” Stephens analyst Scott Fidel said.

The largest U.S. health insurer said it continues to expect adjusted net earnings of $16.25 to $16.55 per share for the year, the mid-point of which is above analysts’ estimate of $16.22, according to Refinitiv IBES data.

Health insurers including UnitedHealth, Cigna Corp and Anthem Inc have announced measures to reduce patient cost sharing on COVID-19 testing and care.

For the quarter ended March 31, earnings attributable to UnitedHealth shareholders fell 2.5% to $3.38 billion, or $3.52 per share, hurt by a 7.1% jump in operating expenses.

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