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UnitedHealth Group Slashes Outlook on Fiscal 2013 Earnings (UNH)

America’s largest private health insurer, UnitedHealth Group (NYSE: UNH) said in its regulatory filing on Monday that it expects 2013 earnings to fall short of Street’s estimate due to weak business environment and looming threat of cuts in healthcare program.

However, the company maintained its outlook on 2012 earnings, which is expected between $5.20 and $5.25 a share.

According to UnitedHealth Group, earnings for fiscal 2013 are now expected to fall in the range of $5.25 a share to $5.50 a share.

Revenue projections for fiscal 2013 were higher than analysts’ consensual estimate. The company expects revenue between $123 billion – $124 billion while analysts polled by Thomson Reuters had forecasted earnings of $5.58 a share on revenue of $119.12 billion.

The Company is scheduled to hold a conference call with investors and analysts on Tuesday.

Earlier in October, the Company said that Street’s projections on fiscal 2013 were way too high in the backdrop macroeconomic uncertainty, weak employment outlook and federal government’s spending cuts. At that moment, analysts were expecting earnings of $5.60 a share.

However, Oppenheimer analyst Michael Wiederhorn said that UnitedHealth has history of exceeding its own guidance. In a research note, Wiederhorn wrote, “Overall, we believe UNH’s outlook will prove conservative.”

Just last month UnitedHealth  boosted the current year’s forecast after reporting that enrollment in its Medicare and Medicaid plans soared  in the third quarter even as  medical costs remained stable. This was the third occasion when the Company boosted its outlook on fiscal 2012. During the fiscal third quarter, UnitedHealth added 2.1 million customers to its medical plans from a year earlier quarter.

Echoing the similar sentiment, Sheryl Skolnick, an analyst at CRT Capital Group in Stamford, Connecticut, wrote in a note to clients, “We still believe that UNH’s outstanding execution and strategic positioning can lead it to exceed this initial 2013 guidance range.”

CRT is now expecting UnitedHealth’s fiscal 2013 earnings at $5.54 a share down from its initial forecast of   $5.70 a share while revenue was upwardly revised to $123 billion from earlier projection of $121 billion.




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