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Key Takeaways

  • UnitedHealth Group will report earnings before the market opens Tuesday.
  • The insurer’s Optum division will be in focus as a key driver of revenue growth.
  • Investors will also likely be watching for updates on UnitedHealth’s recent lawsuit related to the ratings of its Medicare Advantage plans.

UnitedHealth Group (UNH) will report third-quarter earnings before the opening bell Tuesday, with investors likely to be watching for continued growth from its Optum division.

The health insurer is expected to post third-quarter revenue of $99.3 billion, an over 7% increase year-over-year, and net income of $6.16 billion, up from $5.84 billion in the prior-year quarter.

Analyst Estimates for Q3 2024  Q2 2024  Q3 2023
Revenue $99.3 billion $98.86 billion $92.36 billion
Diluted EPS $6.66 $4.54 $6.24
Net Income $6.16 billion $4.22 billion $5.84 billion

Key Metric: Optum Revenue

Last quarter, revenue from UnitedHealth’s Optum division jumped 11.7% year-over-year to $62.9 billion as it added more patients at Optum Health and raised the number of customers using its Optum Rx pharmacy service. 

Analysts expect $63.7 billion this quarter, which would represent a 12% increase. The number of Optum Health patients and those using the OptumRx pharmacy service are also expected to grow from the year-ago quarter.

Business Spotlight: Medicare Advantage

UnitedHealth may also provide updates on its lawsuit against the Centers for Medicare & Medicaid Services (CMS) after the agency downgraded the quality rating of its Medicare Advantage plans.

UnitedHealth alleges that CMS lowered its ratings “based on an arbitrary and capricious assessment of how [UHC’s] call center handled a single phone call that lasted less than ten minutes,” according to a complaint filed in a Texas district court.

The company had 7.7 million members on Medicare Advantage plans at the end of the second quarter. That could change with the open enrollment period beginning on Oct. 15.

UnitedHealth shares have gained nearly 14% in 2024 so far, at $598.05 as of Friday’s close.

Read the original article on Investopedia.