Upcoming AWS Coverage on CVS Health

LONDON, UK / ACCESSWIRE / January 18, 2017 / Active Wall St. announces its post-earnings coverage on UnitedHealth Group Inc. (NYSE: UNH). The Company released its fourth quarter and fiscal 2016 results on January 17, 2017. The largest US health insurer reported sharp increase in revenue and earnings, outperforming market estimates. Register with us now for your free membership at:

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One of UnitedHealth Group's competitors within the Health Care Plans space, CVS Health Corp. (NYSE: CVS), is estimated to report earnings on February14, 2017. AWS will be initiating a research report on CVS Health following the release of its next earnings results.

Today, AWS is promoting its earnings coverage on UNH; touching on CVS. Get our free coverage by signing up to

http://www.activewallst.com/registration-3/?symbol=UNH

http://www.activewallst.com/registration-3/?symbol=CVS

Earnings Reviewed

For the three months ended December 31, 2016, UnitedHealth Group's revenues grew 9% to $47.5 billion compared to revenue of $43.6 billion in the year ago same period, and also coming in above analysts' expectations of $47.26 billion. The Company's FY16 revenues of $184.8 billion grew 17.6% on a y-o-y basis. Revenue growth was broad-based and balanced, reflecting growing demand for the Company's product and service offerings.

For Q4 2016, the Minnetonka, Minnesota, headquartered UnitedHealth Group reported net income of $1.90 billion, or $1.96 per share, compared to $1.22 billion, or $1.26, in Q4 2015. On an adjusted basis, the Company earned $2.11 per share in the reported quarter compared to $1.40 per share in the year earlier comparable period, thus outperforming Wall Street's estimates of $2.07 per share.

Key Metrics

In Q4 2016, UnitedHealth Group stated that the combination of improved performance and reduced individual market pressure resulted in a y-o-y medical care ratio decline of 190 basis points to 80.8%. The FY16 consolidated medical care ratio declined 50 basis points y-o-y 81.2%, reflecting improved core business performance.

For Q4 2016, UnitedHealth Group's operating cost ratio of 15.7% increased from 15.1% in Q4 2015. The Company's FY16 operating cost ratio of 15.2% decreased 30 basis y-o-y due to shifts in business mix and improvements in productivity, partially offset by investments in quality, including Medicare Stars performance, and to support growth.

UnitedHealth Group's year end 2016 days claims payable of 51 days increased 1 day y-o-y and decreased 1 day sequentially. The company's 2016 days sales outstanding rose 2 days y-o-y and 1 day sequentially to 16 days, driven by the rising mix of government business.

Segment Results

For FY16, the Company's UnitedHealthcare segment's revenues of $148.6 billion increased 13.1% y-o-y. The number of people served with medical benefits grew by 2.2 million y-o-y in FY16, with balanced growth across US commercial, Medicare, and Medicaid offerings. During Q4 2016, UnitedHealthcare' earnings from operations exceeded $1.7 billion, and increased $800 million y-o-y. FY16 earnings from operations for UnitedHealthcare of $7.7 billion increased $900 million from FY15, driven by strong, diversified growth and slightly improved operating margins.

During FY16, UnitedHealth Group's UnitedHealthcare Employer & Individual segment's revenue grew $5.9 billion or 12.5% to $53.1 billion, including growth of 11.9% to $13.5 billion in Q4 2016. The division grew to serve 30.6 million people at December 31, 2016, an increase of 850,000 people y-o-y, with Q4 2016 growth of 95,000 people served.

For FY16, the segment's risk-based commercial group plans served 375,000 more people, including growth of 205,000 in the reported quarter. Self-funded offerings for commercial employers served 335,000 more people in FY16, including a gain of 20,000 in Q4 2016. The segment's individual insurance offerings decreased sequentially by 135,000 people in Q4 2016, bringing FY16 growth to 160,000 people.

For FY16, UnitedHealth Group's UnitedHealthcare Medicare & Retirement category revenues advanced 13.3% on y-o-y basis to $56.3 billion, including growth of 15.8% to $14.0 billion in Q4 2016. In the reported quarter, seniors served by medical benefit products grew by 50,000 people, while stand-alone Medicare Part D prescription drug plans declined over the course of the year. The division served 7.9 million seniors with medical benefit products at year end 2016, registering a growth of 8.6% y-o-y.

UnitedHealthcare Community & State:

In Q4 2016, the Company's UnitedHealthcare Community & State generated revenues of $8.6 billion, up $1.2 billion or 16.6% on a y-o-y basis. For FY16, the category reported revenues of $32.9 billion, higher by 14% as compared to the year ago period.

During FY16, UnitedHealth Group's Optum revenues surged 23.7% to $83.6 billion, with Q4 2016 revenues increasing to $22.2 billion, up 1.2% on a y-o-y basis, reflecting strong double-digit percentage growth at OptumHealth and OptumInsight, offset by a 4.8% decline in OptumRx revenues due to known Catamaran customer losses incurred prior to its acquisition by Optum. Optum's FY16 earnings from operations grew more than $1.3 billion, or 31.8% on a y-o-y basis, to $5.6 billion and operating margin was 6.7%. The Q4 2016 operating margin of 8.1% expanded 120 basis points compared to the year earlier same quarter.

Cash Flow, Shareholder Returns, and Adjusted Net Debt

In FY16, UnitedHealth Group's return on shareholders' equity of approximately 20% increased 220 basis points, while the debt to total capital ratio decreased 250 basis points y-o-y to 46.2% at December 31, 2016. The Company's dividend payments grew 26.6% to $2.3 billion compared to FY15, and the Company repurchased approximately 10 million shares for $1.28 billion in FY16, including 1.2 million shares in Q4 2016. UnitedHealth Group's FY16 cash flows from operations of $9.8 billion were 134% of net earnings.

Outlook

For FY17, UnitedHealth Group reaffirmed its guidance. It estimates revenues of $197 billion to $199 billion, net earnings of $8.75 to $9.05 per share, adjusted net earnings of $9.30 to $9.60 per share, and cash flows from operations of $11.5 billion to $12 billion.

Stock Performance

UnitedHealth's share price finished yesterday's trading session at $160.66, slightly down 0.70%. A total volume of 5.47 million shares exchanged hands, which was higher than the 3 months average volume of 3.99 million shares. The stock has surged 20.44% and 49.59% in the last three months and past twelve months, respectively. Furthermore, since the start of the year, shares of the Company have gained 0.39%. The stock is trading at a PE ratio of 23.73 and has a dividend yield of 1.56%.

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SOURCE: Active Wall Street